Do I need an international driver's license to rent a car in Italy?
You need an International Driving Permit for Italy, yes. It's not a license, just a translation, in several languages, of your own driver's license. Pick one up at your local AAA office for about $15.
Joseph,
The "short answer" is YES, you will need the compulsory International Driver's Permit to drive in Italy. This must be used in conjunction with your home D.L. (the IDP basically just translates the terms of your home license into several languages and is not a "license" as such).
While the rental staff may not ask for it, the Police might (especially if you're involved in an "incident"). Failure to produce a valid IDP can result in fines on the spot, and failure to pay can result in the car being impounded (of course, storage fees would then apply too).
For driving in Italy, a GPS (along with a good Map for backup) would also be a good idea.
You may also want to have a look at other posts here regading the ZTL areas that are increasingly common in many cities in Italy (especially Florence). Passing through one of the automated Cameras will result in a €100+ violation notice being produced EACH TIME.
I tend to use car rentals "strategically" to visit spots that aren't well served by public transit. For travel between major cities, rail is usually much faster and easier.
Happy travels!
Thanks for the help.