Transportation
AirThe two major international airports are in Milan and Rome. You can bypass these cities by getting a connecting flight to Venice or Palermo, for example, and in the summer there are a few flights direct to the smaller cities, some transcontinental. However, domestic flights are quite pricey. The only carrier is Alitalia, and its affiliate, ATI.
Train
The Italian State Railways (Ferrovie dello Stato, or simply FS) is one of the cheapest to use in Europe—so much so that it does not pay to purchase a Eurailpass if you are traveling only in Italy. There are different kinds of trains. The rapido trains or InterCity (IC) are the fastest, and are the Italian contribution to the international service. These trains usually offer first-class as well as second-class service with reservations required, air-conditioning, and dining cars (but more often meal trays served at your seat), as well as sleeping cars when appropriate. Next are expressi trains, which make more stops, then diretti, and, last in speed and comfort, the accelerati or locali, mostly second class and recommended only if there is no other way to reach your destination.
Trains can be crowded in the summer and holiday season, so you will want to reserve (for a fee) at those times. But first-class cars often remain unfilled, so even if you have a second-class ticket, you can pay to upgrade. A few credit cards can be used for payment at ticket windows.
There are special passes for the Italian State Railways alone, in addition to the Eurailpass options. All offer unlimited mileage during a set period of time, and once you present your pass at the stazione for the first time to have it activated, you no longer need to stand in ticket lines.
Bus
Intercity or long-distance buses, called pullman, are an invaluable means of travel within Italy. They supplement the areas where rail connections are nonexistent (such as Florence to Siena) or a bit too locali (Siena to Rome) and they can be the most efficient means of travel in some regions, such as in Sicily where the highways are often better than the tracks. In fact, the pullman is another reason not to purchase a Eurailpass if you are traveling only in Italy. Usually these local companies operate from the streets around the train station, rather than from terminals, and have nearby offices for the purchase of tickets, or you purchase on board.
Car Rentals
Driving a rental car is probably the best way to explore Italy, but a rental car can also be one of the most expensive items of your trip. Gasoline costs around US$4 per gallon and autostrada tolls, particularly in the north, can be stunning. In addition, there are no "rent-a-wreck" or bargain deals as are common in some European countries and in the U.S.
In order to save money, first check whether your flight includes a fly/drive option that might bring you some savings. Whatever you do, reserve before departure: Rates are highest when arranged in Italy. Second, plan your itinerary to make the best use of a car. If you are beginning in Rome, say, don't pick up your car at the airport; wait until you are leaving the city. Further, since drop-off charges are minimal in Italy, don't keep your car when staying for several days in a city; you'll save on parking as well as rental fees. Third, avoid paying collision damage insurance that can add from US$5 to $10 per day to your rental cost. Many credit cards now have collision damage waiver policies (called CDW) if you refuse the collision coverage and charge the rental to their card. If a rental agency refuses to allow you to waive their collision damage, look for another agency. (However, make sure your credit card covers Italy in its policy and make sure you understand the procedures.)