Italy has a great rail system.  The “name” trains like EurostarItalia are among the best in Europe.  The trains are generally fast, clean and cheap and go virtually everywhere in Italy.  I think train is definitely the best way to get around in Italy.  However there are some issues.

Many Italian trains are very crowded.  Some of the local trains feel like a subway at rush hour, thus pickpockets can be a problem when you’re a wedged-in strap hanger.

There are sometimes long lines to buy tickets, or even longer lines to buy reservations if you’re using a railpass.  You can avoid the ticket lines by buying on-line at trenitalia.com (set up and ID and password before you leave home) or by using the automated ticket kiosks (very user friendly and easy to use in English).   Ticket agents aren’t really “touchy”  but the culture is different.  If you’re next in line when it’s time for the agent to go on break, they will probably close the window in your face.  Train staff can be touchy if you don’t have both ticket (or railpass) and reservation if the train requires a reservation.  Another issue is crooks pretending to be “staff.”  Make sure you’re at “left luggage” before you pay someone to watch or check your bag.

Many Italian trains require reservations that can be fairly expensive and involve waiting in line.  Other trains are crowded enough that reservations are recommended.  You can often avoid trains that require reservations by taking a slightly slower (because it makes more stops) regional train, but many of the trains at peak times require reservations.  Since buying reservations is more of a hassle in Italy, using a railpass if more of a hassle in Italy, but if you take advantage of the kiosks, rail travel in Italy is as easy or easier than elsewhere in Western Europe.

I won’t deal with the urban myth of gassing. 

ok sounds hectic.
 
that online ticket site will be a great help.
 
so these urban myths of gassing, i guess that will go in the same catogorey as gypsies?
 

I travelled all over Italy in August ’05, without a railpass.  I never had to wait more than 20-30 minutes in lines to buy my P2P tickets and reservation.  Never had problems with trains being too crowded, and never had problems buying tickets from unfriendly people.  The only train that I didn’t like was from Florence to Pisa.  It was a regional train (which I would avoid if I were you — they take longer, and are more crowded, and you only save a few Euros by taking them —  I prefer IC trains myself, as they are right in the middle in comfort, price and travel time).

I ended up buying all of my tickets a day or 2 before I needed them, and never had problems getting all the reservations I needed. 

Some families have made begging their occupation, and you will definitely see these in Italy, in all sorts of scenarios. (Imagine a pitiful-looking 6-year-old girl in the metro wandering from person to person. Or someone might fake a handicap and sit in front of a church all day, and so on.) Pickpocketing is definitely a concern, regardless of the ethnicity of the pickpocketer, and many pickpocketers look like well-dressed business people, and some families have made pickpocketing their occupation as well. You can address that concern by being aware and using a moneybelt (one worn under your clothes, and not one that you access in public). There are some other scenarios too, like swarms of children or youths coming up to you with cardboard or newspapers and then trying to pick you clean, but I never had this happen – however, it did happen to someone I know in Spain recently. If you think “gypsy”, you might overlook scams perpetrated by people of other ethnicities, so try to focus on awareness and protective techniques, rather than ethnicity.

Trenitalia.com works great.  On some routes you can go “ticketless” with just your confirmation.  On others you receive a confirmation number which you enter at the kiosk and it prints your ticket.  The kiosks are really slick.   I bought the tickets for my first train (was arriving by ferry from Croatia) at trenitalia.com and printed out at the kiosk in Ancona.  I bought all the rest of the tickets at the kiosk.  I was never in a station where there wasn’t at least one kiosk “open” even though the ticket lines at Termini were miles long. 

it is usually smart to always travel with a gas mask while in Europe.

sarcasm meter=10

lol gas mask

All great advice above!
 
I’d like to suggest an another option to Trenitalia.com – it is http://www.italiarail.com – ItaliaRail.com is the official Trenitalia site for overseas travelers.
 
The main benefit is that if there are any issues with your tickets it is much easier and better customer service. Most prices are the same as in Italy although there is a delivery fee for the tickets.
 
Even though there is a delivery fee I think it is still better than to standing in line (even if it is just 20 mins.) – you have your tickets in hand and just have to hop on the train when you get there.
 
It would be great to get feedback from anyone regarding booking directly on Trenitalia.com vs. on http://www.italiarail.com.
 
Price Comparison for Rome – Florence 2nd class Standard fare Eurostar Italia:
 
Trenitalia.com – 33 Euros ($42.75)
 
ItalaiRail.com & Railpass.com – $40.00
 
Rail Europe – $58.00  
 
The price is actually cheaper if you buy it through ItaliaRail.com
 
Ed note: I work for the Company that owns ItaliaRail.com