Went italy on a 2 weeks trip in Jul, DIY, didn't join any land tours.
However, I think if u want to cut down on cost, might be better to go with tours. Of cos, there's not much room to shift your itinerary or plan your time.
If you are planning to DIY, I would recommend you check out
www.virtualtourist.com,
www.tripadvisor.com on things to watch out and ideas, tips to help you plan. For accomodation, check out
www.venere.com, it's a safe site to book accomodation and there are reviews to help you choose.
For food, if u wanna save money, eat sandwiches/pizza slices for meals. We ate at normal restaurants/cafes for all our meals and ended up spending quite a lot on food. Didn't get to eat much nice food, just like 1 or 2 of the restaurants even though most of the ones I went to were highly recommended by the guide books.
It's good to spend at least 2-3 days in each place, else there is probably going to be too much travelling which is very tiring.
Went to Milan(just half day), Venice, Dolomites(Italian Alps), Florence, Capri, Rome in 2 weeks and thought it was rather packed.
In fact my hubby was complaining it was too tiring. Using trains to get between the cities would be most convenient.
Capri is nice - but it's better to stay the night there than make a day trip... Accomodation on the island is quite expensive though. Stayed at La Floridiana(
http://www.lafloridiana-capri.com) - quite nicely decorated with sea view. Heard La Minerva is quite good too.
Stayed in a nice and conveniently located B&B in Venice - Locanda Correr. Very nicely decorated, friendly proprietor & within walking distance to san marco sq but located in a back alley.(seems safe though). Good restaurants to try: Tratoria Do Forni(
http://www.doforni.it) - food is good but moderately expensive. Pastas & risottos are nice. Osteria Rivetta (Campo San Filippo, Castello 4625) - reasonably priced and food is quite good.
For the museums in Florence and Rome, I would recommend you make advance reservations, else be prepared to queue for a few hrs, esp for popular museums like Ufizzi & Academia at Florence. Pre-book a vatican tour as well, it's more enjoyable with a tour guide. Good to have tourist maps or guidebooks. I think choosing the right location for accomodation is important, cos there will be lots n lots of walking, so good to stay near tourist sites or safer zones.
Hope the above info will be helpful for those who are going italy