It seems like everyone you talk to these days is going to Italy, just came back, or knows someone who's going. I spent the two weeks before Easter traveling between Venice, Tuscany, and Rome, both by car and train.
Each means of travel has its pros and cons. A rental car is especially useful for getting up to the Tuscan and Umbrian hill towns. As long as I stayed out of the big towns and stuck to the autostrada, driving in Italy was less stressful than the 405 at rush hour. The only downside is that parking in many of these little towns is a challenge. I only found the Leaning Tower in Pisa by accident--I was looking for a place to park, turned down a street and there it was! I told my friend to snap a picture of the tower because I may never find it again! By all means, NEVER drive in Rome. Traffic signals are only suggestions and traffic lanes are ambiguous at best.
In my experience, train travel in Italy is surprisingly reasonable and relaxing. There are many trains running throughout the day, so the trip can easily fit into your schedule. My advice is to pay only a few euros more and get a first class ticket. It's well worth it!
Florence was by far my favorite stop in Italy. You find great works of art at every turn, the pace is slower and the natives very friendly. I stayed at the Hotel Centrale and, as it was a few days before Easter, they gave everyone a beautifully wrapped box of Easter bread (somewhat like a hot crossed bun).