I found the iPad to be very, very useful in Italy. That said, I might have been using it a bit differently.
I had the 3G model (which isn't locked to any carrier, and I think that applies worldwide) but didn't use it at all. The AT&T international roaming rates were unaffordable (for me) and obtaining a 3G SIM card was fairly difficult. I investigated a bit, but eventually gave up. The biggest complication is that the iPad takes the new, smaller MicroSIM card, not a regular SIM card. You can cut down a regular SIM to MicroSIM proportions if you have a vague idea what you're doing, but again I decided I would just rely on WiFi where possible. The one major argument in favor of the 3G version of the iPad is that it has a built-in GPS receiver, which the WiFi model does not.
Unfortunately, lots of hotels didn't have WiFi, and a few had it at a very steep price. I was able to use it in a few hotels for free or for a small price, and did so whenever possible.
The things I used the iPad in Italy for were, in order: maps, photo storage, movies, email, and web browsing.
Maps
For maps, I used an inexpensive application called OffMaps that lets you download detailed maps that are stored on the iPad itself, instead of needing to access the internet (like Google maps). I knew we would have no internet access for much of the time (especially out in the country) and paper maps just weren't detailed enough considering how broad of an area we would be traveling in. My paper map of Tuscany, for instance, showed only the major roads. There are lots of roads in Tuscany that are nowhere near "major".
The nice thing about OffMaps is that it can use the built-in GPS to show you where you are on the map. It doesn't tell you which way to go, or give you turn by turn directions, or calculate a route, or anything like that -- it is literally a digital equivalent of an analog paper map, with the additional ability to zoom in and out and to pinpoint your exact location on the map. We did a lot of deliberately getting lost in the Italian countryside (something I highly recommend) and OffMaps was my go-to reference when it was time to get un-lost again.
The one downside of OffMaps is that you have to spend a good deal of time ahead of time downloading all the detailed maps you need. You can only download 150 megabytes at a time, and there are multiple levels of detail that take up a lot of space. I eventually got all of Tuscany -- all 6 gigabytes worth of full-detail maps -- but it took a week of on-and-off downloading. If you don't need quite as broad of a range of areas, it should be quite a bit easier.
Photo Storage
I was ultra-paranoid about getting my camera(s) stolen (or lost) in Italy. I was more worried about the photos than the camera itself, of course. So I took the iPad camera kit with me and stored all my photos, every day, to the iPad. It was quick and easy and I'm glad I did it, even though I managed to keep my cameras.
Once they're on the iPad, though, there's not a whole lot you can do with them until you get home. You can email photos (in smaller sizes), but you can't really upload them to a website in the way you would from your computer. The major photo-sharing sites have iPad and iPhone apps that you can use to upload, though, so that's something.
Once you're home, you just hook up the iPad to your computer as if it were a camera, and you can access all the photos.
Movies
I rented about five movies from the iTunes store before I left. I watched two on the plane ride to Italy, one in Italy, and two on the way back. The battery life on the iPad was awesome, and I had no trouble at all with power. Much better than the in-flight movies they were offering.
Email and Web
As I mentioned, we didn't have a whole lot of internet access while we were there. Still, I was able to update a mobile photo gallery by emailing photos to a special address, and I did a little web browsing. I even caught up with Modern Vespa here and there. This was nice, but not the chief use of the iPad while I was there. If I had had 3G access (affordably) I probably would have used this a lot more.
I hope that makes things a bit clearer.