For our Italian holiday this summer we had a rental car. It worked well for us, traveling with three children, and for spontaneity purposes (like an unplanned visit to Rainbow Magic Land outside Rome and impromptu shopping stops... more on that later)... but driving in a different country does present its challenges.
We made great use of our tomtom gps system. Truly such a tremendous help. In most cases.
We eventually learned to pick and choose the times we'd follow instructions explicitly, after being led up a couple impossible alleys. (Of course we made mistakes, just trying to deal with it all.) Here is a video I shot of one such case, somewhere between Pompeii and Mt. Vesuvius. We made our way up an ever narrowing path to a brick wall, and got the car just about turned around... here is the journey out (at the very end that's someone beeping at us to go faster!).
p.s. I recommend the full, extra, super coverage insurance. We used it.
p.p.s. Sorry about the high pitched tone at the beginning... that was tomtom complaining. It ends at 0:40.