I'll be touring Italy in August. I plan on booking hotels in Rome and Venice online, but should I worry about booking cheap hotel/B&B/Convent places to stay in small towns? OR does it depend on the area? Should I book for Cinque Terra or the Hilltowns or Dolomites? OR will I be able to find reasonably priced lodging on the fly?

IMO all those "romantic" places will have been booked by overplanners such as myself.

Why waste very VALUABLE time looking around when you can more or less do so ahead of time and spend the actual time there seeing things?

Ditto. Those cheap convents and B&B may have been booked up back in Feb/Mar - especially in the CT and other popular touring areas.

Yes, book ahead for August.

I got alot of no vacancy responses back for September in Venice so I would definitely book ahead.

If you go to cities like Parma, Bologna or Lecce, you can easily not book. After fighting the lines of traffic heading for the beach towns of south Italy one August we arrived for our couple of days in Lecce to find our hotel 95% empty. But touristy places and anywhere near the water -- look out!