I recently cycled for 90 days in Italy and enjoyed the trip very much. Italy is great to visit, and cycling is a great way to travel. Also It is possible to experience the country for very low cost by free camping most nights; I explain in the travelogue how I did this. My ride started in Rome and went south along the coast, made a loop of Sicily, continued around the "foot" of Italy to Brindisi, then turned inland north through the Apennines. Lastly I swung by Bologna, Venice, and Trieste before exiting to Slovenia and Croatia. The ride ended in Zagreb.
Don't believe the Lonely Planet Italy and its 100 Euro daily "budget"! I was spending close to 20 Euros per day for everything, including occasional stays in hostels and campgrounds.
The main drawback of cycling in Italy are the narrow and not always smooth roads. If you have steady hands when steering the bicycle you will be OK because Italian drivers are accustomed to bicycles on the road.