Italian Rail Passes

People who have backpacked through Europe…..Need your expertise!!!!!?
I am planning a trip to Europe going to start in London, so the english barrier is not that broad at first. I will be going next May, so one year. PLENTY of time, because I heard that if you do it in the summer you must have it planned well in advance. Anyway. I want to visit the following: Italy (spend most of my time there!! Spain, France, German, Greece. I really want to see a lot of Italy though my family is like purebred italian and i want to see venice, rome, sicily, spending around 2 weeks in italy. I ultimately want a 3 month vacation backpacking through Europe and staying in hostels. I want to visit every country, and therefore have opted for a Rail Europe pass. I have found airfare to London from chicago for $794 roundtrip, now I need to know how to plan my trip.
how much spending money is necessary for hostels……I do not plan out on eating much, and drinking seldomly. I am 23 and traveling solo!
I must put out a shameless plea for the BEST resource ever, go to this website.
www.couchsurfing.com…I am 23, female and was a bit nervous about staying with strangers, after my first experience..it is the BEST ,everyone on the network loves traveling, opening up their home and welcoming you into your city…I have met a lot of people who I still keep in touch with and I would be able to give you some contacts through the site..hostels can be expensive eventually…relying on altruism and some cool new people cant hurt!