When I get to Italy and rgister/activate my TIM sim card, am I going to have to do something special to activate SMS and MMS on my phone? Or will it automatically work if I try to send/receive a message? Also, are incoming SMS and MMS messages free?

I have an unlocked z520i from Sony Ericson.

SMS are surely active from the moment the card is active, I don't know with MMS, probably it's the same, but surely you have to configure your phone to use them.
They are both free of charge when you receive them.

As far as I know, some European providers only activate MMS automatically on someone's SIM once the first MMS has been sent. At least this is the case with German networks.

Same thing with tmobile here too. The first MMS has to be sent from the phone. I guess that tells the system that the phone is capable of receiving MMS. SMS is automatically active. Nothing special to do.

ok....thanks! I leave in a little over a week....WOO HOO!!!!

Yes. Incoming SMS are free in roaming too (except 2/3 countries) while for incoming MMS you have to pay only when you are abroad (anyway Tim has a promotion until next 30th Sept. and incoming MMS are free of charge in intl roaming)