we are spending only two days in Italy, rest of the time in Switzerland. We are entering the country on the train from Milan and then flying out later from Zurich. If we get the Swiss CARD...how does that work on the train ticket from Milan...do I purchase a train ticket from Milan to Spiez and only get charged for the Italy part of it?
When we used the Swiss Card in 2008 we used it from Zurich airport to Lauterbrunnen as our inbound leg. Our outbound leg a few days later we were going all the way to Rothenberg. The Swiss Pass covered us from Lauterbrunnen all the way to Basel Bad. From there we had a ticket we purchased from Deutsche Bahn that covered us from Basel Bad to Rothenberg.
So, I'd guess you would need to purchase a ticket from Milan to the first Swiss border station and you would have the conductor validate your Swiss Card in Switzerland on the train. I'm not familiar with the train connections from Milan, so someone else will have to share the particulars of how to get from Milan to your destination in Switzerland. We changed trains in Basel Bad, so for us it was simple as the conductor on the train out of Lauterbrunnen validcated our Swiss Card for the outbound leg. Hope this makes sense! :-)
Which route are you taking from Milan into Switzerland? If you go the north route via Brig towards Spiez, the Swiss Card coverage kicks in at Domodossola, which is still in Italy.
If going via Lugano, it kicks in at Chiasso.
You can see the coverage on the synoptic map:
http://www.swisstravelsystem.com/download_sts/uebersichtskarte_en.pdf
our final destination is Interlaken. We are taking the train from Milan, through Brig and then changing for Interlaken in Spiez.
Then you Swiss Card will take you from Domodossola all the way to Interlaken, as long as you do the journey in one day.
Make sure you follow the instructions for validating it---you might have to write in the date of use on it.