Craig,
There are restaurants for all budgets in Italy. So, first things first.
Don't expect an American style breakfast in your hotel (or anywhere else for that matter). The typical continental breakfast is cold cuts, cheese, breads, cereal, fruit, yogurt and drinks. The size of the buffet is heavily dependent on the price category of the hotel.
I have never been able to sit down and eat an entire first course (primi), second course or entry (secondi) and side course (vegi's etc.) at one sitting - too much food. My wife an I would often each order a primi and then we would split a secondi.
While sitting on a piazza looking at a church or fountain is really romantic, the price of the meal goes (way) up and the quality usually goes (way) down. Look for places a couple blocks away from the big attractions for better food at a better price.
I had fun cruising Google Maps looking for restaurants before my trip. Most have web pages and most of the menus were current enough to get a good idea of the cost.
To get the scoop on dining in Italy, check out blogs like Ron in Rome.