Standard advice for rail problems: read www.seat61.com
More generally, no single answer will satisfy all your longings and every destination. To "travel on the fly, when the mood strikes me" is possible if your money is unlimited. Otherwise, you will have to balance impulse against the practicalities of budget and also supply and demand. I mean, some popular inter-city express trains may be sold out the day your whim moves you to travel.
Even with a Eurail or similar pass, some fast trains in some countries require a seat reservation which can be a hassle to obtain just before departure. Other trains, other places, will have tickets available when you get to the station. No one answer.
The general bias against passes versus point-to-point is grounded in the need to be travelling constantly to save money. In some cases a pass will be a deal. Only your own research can completely assure you of your choices.
Be calm, expect a few bumps in the road, and relax and enjoy what should be an adventure to remember.

seat 61 is you friend . . .

But I also think you should re-post over on the Europe Forum. There are daily threads about this very dilemna.

There are lots of folks who know about European trains and post on Europe who never peek over here on Travel Tips.

Hey everyone, thanks so much for your replies! I guess the fact that I stated I wanted to just roam around was a little too vague so I will try to be a little more detailed. BTW, Im 42 and traveling alone, so the Eurail Pass I was looking at was the 2 month Global Pass for about 1700 bucks.

That being said, I plan to fly to Germany to see friends, then head south from there and work my way north as the weather warms. I havent decided whether to fly to Venice from Frankfurt, or take the train and stop along the way (Munich, Innsbruck). I then plan to ferry to Greece, hit Croatia after that, then onto Eastern Europe then off to the UK. If time and money permit, I would like to also hit Spain and Norway before heading back to Frankfurt for the trip home. I have a total of 3 months in Europe

That is alot of traveling and so I guess my main concern is like I stated in my original question, which is; point to point or Eurail pass? I poked around on the web to get an idea and started with my first leg, Italy. I will give you a sample of my itinerary with prices that I found which include booking now vs having the Eurail pass. In each leg, I chose the cheapest "buy as you go" 2nd class fare I could find (which I assume may be higher if I actually book day of travel vs. what they showed now as an advance reservation) and then searched that same leg again with the Eurail pass included. This is what I came up with:

Venice to Lugano: 68.00 vs 31.00 with pass

Lugano to Genoa: 40.00 vs 20.00 with pass

Genoa to La Spezia (Cinque Terre): 11.00 vs. 5.00 with pass

La Spezia to Rome: 41.00 vs. 5.00 with pass

Rome to Salerno: 27.00 vs 5.00 with pass

Salerno to Bari:27.00 vs. 15.00 with pass

Ferry to Greece: 79.00 (on deck, no seat for 9 hour crossing) vs. Free airline type seat with pass

So my total just for the Italy leg of my trip came to 293.00 for "pay as you go" or 81.00 with the Eurail Pass. So I haven't even left Italy and Im already at 300.00 bucks by not having the pass.

This is where the confusion is setting in. 5 more countries like that and Im almost at what I would have paid for the Global Pass, not to mention I get to travel first class when available, not have to lock in a pre planned itinerary, as well as some other minor perks and discounts that vary by country. The free ferry crossing is a big money saver though. So I guess Im not getting something here about why the Eurail Pass is the bad idea everyone says it is. Granted this is just an example I found using the Italiarail website, and some other countries may turn out cheaper, but on the whole, Im still not sure. Im wondering if someone who had done a trip similar to mine without the pass could share their experience and maybe that would help me decide. Thanks again for the advice everyone, and sorry this turned into a novel!

You didn't subtract the 81 (euro? USD?) nor offset part of the cost of the pass. Also, trains will be cheaper in Eastern Europe. You have to consider the whole trip.

That said, if you're taking a LOT of trains, AND want flexibility you should probably go for the pass. Although that is a lot of money! Personally, I've only ever gone first class once, and I didn't think it made much difference.