I spent 2003 and 2004 in Rome for New Year’s. We had a blast. You will probably end up doing what the rest of the city does. Everyone meets up at the Spanish Steps and (I would definitely suggest getting a spot at the very top) watching fireworks and drinking and watching the crowds. It was a lot of fun. Definitely grab something to eat earlier in the evening at a small cafe or even grocery store. It is very hard to find a restaraunt in the city that isnt serving a 150 euro dinner with 10 courses on New Year’s Eve.