I had recently heard something about being able to get a SIM card while you are abroad so you can use your phone for sat nav or looking up information. Is this true at all and if so does anyone know much more about it that they could fill me in.

Thanks

You need a phone which will work in Europe. Most smartphones will. You need it unlocked, either because you bought it that way or your provider has (or will) unlock it for you.
You can then buy a SIM in the country you are visiting. You will be charged a lot for calls home on it, and need to be aware of data use and charges, and of course how to add more money to it.

For sat-nav why not download the maps you need to your phone before you leave home. Then you don't need a data connection. As for looking things up, there are plenty of free WiFi sites in Europe you can make use of (McDs for instance).

You need to decide if buying a SIM is worth it for what you want. If you aren't makiing a lot of local calls and don't need constant data access then you may decide not to buy one in which case you should make sure roaming is turned off on your phone, and use WiFi only.

You need an unlocked quad-band (GMS) phone if you want a local SIM card in Europe to make calls and get data. I use Lebara for France, TIM for Italy, for example. This is way, way cheaper than taking off for Europe with your US cell phone and incurring outlandish roaming fees.

OP, if you have Verizon or Sprint or some other CDMA provider, you'll be wanting to buy an unlocked GSM phone on eBay or pick up a cheap used smartphone in Europe when you land (I would be truly shocked if you had to spend more than 10-20 Euro on a perfectly capable used smartphone from a used electronics shop). Then just buy a SIM with data plan and go about as normal.

<i>You will be charged a lot for calls home on it,</i>

"A lot" is relative and it depends on the SIM. If calling home is important to you, get a SIM with 5-10 cent a minute or less rates for calls to the U.S. Lebara charges a whopping 1 cent per minute for calls to the U.S.

<i>For sat-nav why not download the maps you need to your phone before you leave home. Then you don't need a data connection.</i>

That may be true for Sat nav but you'll definitely want a data plan for Google Translate, Google Maps, Google Goggles, Öffi Stations, DB App, XE.com, etc. That is, of course, unless you want to depend on widespread availability of WiFi. Which leads us to this sweeping statement:

<i> As for looking things up, there are plenty of free WiFi sites in Europe you can make use of (McDs for instance).</i>

Except in Germany, where I know that you know that free WiFi outside of your hotel (presuming that they didn't charge you for it) is hard to find. Plus it can be inconvenient to look for and then stop for a minute at some random place with free WiFi to look up info. Considering that most of the places that offer free WiFi are going to be cafes/coffee shops/restaurants/bars/etc., you'll want to order something (unless you want to be That Person) and so you should time your information queries to correspond with meal times or snack breaks lest you start spending more money. Stop 3 or 4 times and guess what? You've almost spent enough money for a data SIM.

Maybe I travel different than most folks but having a data plan saves so much time and effort.

It depends on the phone model which you have not posted.
For a phone to accept a local SIM in Europe and be functional, it has to be

1) GSM capable
2) operates on 900mhz and 1800mhz
3) unlocked to accept SIM different from your carrier

If you are from the US, ATT wireless and T-Mobile use GSM. However, not all of their phones satisfy #2, the frequency requirement. Low-end phones do not come with these frequencies.

If you are on Verizon or Sprint, only a few premium models come with the GSM capability. For iPhone, it is has to be 4S or higher.

Looking up info not stored in your phone requires a data plan. Using a sat nav is more involved. The gotcha is the map. If you have a data plan, you get them continuously downloaded. If I do this, I plan on using 10MB/hour while the nav is in use for driving. If you don't have a data plan, you need to download offline map to your phone and rely on GPS hardware only. If you have an Android phone, google map let you keep up to 6 maps downloaded from the google map in your phone. Each map has a size limit, but a map can capture entire greater metropolitan Rome and more. Google made is exceedingly unintuitive to do this, but hey, it is free. For iPhone, I think you have to buy at a nominal cost. Realize that if you rely nav entirely on GPS hardware, it seems to take forever to get your location. It locks in the position faster with a data plan.