Falling under Italian jurisdiction could lead to troubles later on. Ianal but if you start making money perhaps they could want you to pay taxes. Furthermore Italy has one of the lowest levels of press freedom in Europe(1) and Berlusconi(2) (the prime minister) is pretty dictatorial and almost fascist. There are several lawsuits against him and he just keeps changing the law to evades being prosecuted.
Recently three Google executives were convicted in Italy because of a video uploaded to Google Video:
So yes, I'd definitely advice against starting a business with only an .it domain (without the .com, just in case). If you don't have the .com domain to fall back, definitely check with a lawyer in Italy.