When I went to Italy on vacation for a week, we were undecided on whether to rent a car or not. Many people told us that the trains in Italy are supposedly very convenient and there's no reason to rent a car there. In addition, we were told that the driving in Italy is really not simple.
Thankfully, we did not heed their suggestions and ended up renting a car. It was a great choice. I don't know how we would have gotten to so many places, that we were only able to get to because we had a car.
So my advice to anyone heading to Italy and wants to be able to tour the country on their own schedule, is to rent a car.
Renting a car there definitely gives you access to so many more smaller out of the way places. The biggest problems are parking, avoiding ZTL zones in tourist towns, and the toll roads. Toll roads aren't really a problem, but the costs can add up quickly and should be factored in for budgetary purposes. A rough estimate from our last trip, was that it generally runs around 1 euro per 10 kilometers on the autostradas. Good thing about them though, is that they always have good toll booths that will accept cash or cards, and you don't have to worry about pre-buying passes like some other countries (such as Slovenia).
Amen! I have traveled Italy 3 times with rental cars and a couple of times without. There is no comparison. You can even save money in transportation as some train tickets are quite expensive (and not to mention, it is per person...). You can visit so many places in limited time. You can find amazingly fantastic places that you would never plan to visit otherwise. Driving in Italy is nothing diffeent from what we do here back home. As Ed4000 mentioned, parking sometimes is tricky (like many cities in other countries in Europe) but you can figure it out. I always rented automatic car but the price that I paid was not outrageous (~$50/day).