PB,
yes, I lived in Italy for several years (I spent a few years in Italy, a few in Israel and a few in S. America - which is one of the reasons I ended up starting medical school by the time all my friends had finished their residency...
)
I have a brother who is a physician in Italy and followed him, from a distance, when he was attending med school (at U. of Rome, by the way, and that is why I can actually feel very confident about advising people against it, LOL). Last time I was there he told me about a program for foreign students at the U. of Perugia, where you spend a huge part of your first year in Italy studying Italian and getting ready for the Italian proeficency test. See, there didn't use to be a language test a few years back, then the Italian government started demanding it because too many foreign students could not speak Italian and a few schools began offering a language program so that their applicants could make it through the test. I don't know if the U. of Perugia has a med school or not, but I think you should find out and also find out if any of the medical programs you are interested in have such a language course to enable you to pass the language test. Again, I would try the education attache at the Italian Embassy in DC.
I agree with Stephen though, about the language requirement, unless you are going into a program which is taught in English (which is why Israel, Ireland, Australia may be more appealing). Could you learn enough Italian between now and your exam to pass it?! Hard question to answer. If you are set on an Italian program, ask the Italian Embassy if they have a sampler of the exam or a list of material covered. Let me know if you get it, and I will let you know if I think it is feaseable to learn it in a few months.
If you speak Spanish, then Spain would be a good option. Don't worry about the medical terminology, you will have plenty of time to become familiar with that in med school. The cost of living in Spain used to be lower than Italy, but I haven't been there in so many years, and that may have changed. As for the quality of their medical programs, I have no idea, although, as a rule, I think most Western European programs are fairly comparable (sorry if I am offending those of you who are keen on Eastern European med schools, but I met plenty of Eastern European medical graduates and I was not impressed by the quality of their programs - the good graduates were mostly self taught).