In Italy the Euro is the local currency, making it easy if you have some left-overs from other nations, and making it easy to understand how much things cost. In the former days the Lire was the currency, but since January 1st 1999 the Euro is the official currency of the nation.
The prices in Italy are in general not very high, at least not if you compare them with for example Germany, England and the Scandinavian countries. Prices are of course higher in the very touristic areas of Rome, but except from that you can buy most of what you need at good prices.
If you wonder how much 1 Euro is worth in your local currency, you can use the currency converter beneath this text.