I'm planning a trip to Venice in early July. Should I be considering doing this another time because of the crowds/heat? Also, is a side trip to Florence or Tuscanny doable by Train or are there any small tour groups that take side trips from Venice. I will only have approximately 7 days for this entire trip.

Do you want to do a day trip to FLorence/Tuscany or an overnight? Given 7 days, you can split your time between the 2 areas. FLorence is a bit far for a day trip.

My husband and I will be taking a train from Florence to Venice. Would you recommend buying tickets in advance or wait till we are in Italy.
(We'll be arriving to Rome 10 days prior to the actual train trip).Is there a sugnificant difference in price?

Here's a recent post able days trips from Venice that may interest you:
http://www.fodors.com/forums/threads...p;tid=34593925

If you have 7 full days, you can split your time between Florence and Venice - 3 days each with the 7th day for travel between the two. You can always take a trip into the Tuscan countryside or to Siena if you run out of things to do in Florence. I wouldn't recommend a day trip from Venice to Florence. Better to change locations.