Hopefully someone with recent experience will respond to your questions. In the meantime, you could confirm the translation requirements for both Boston and NY by searching on their respective websites. Unless the consulate specifies that you must choose someone from their own list of approved translators, you should be able to select your own.
Next, it may be likely that you will need to have the translations legalized and/or the documents authenticated (especially if documents originate outside of the jurisdiction of the consulate where you apply). This requirement should also be posted on the consular web pages, and if not it's best to search for posts from recent applicants. The consulates legalize/authenticate documents and I think that it is now the applicants responsibility to submit the documents to the consulate for this to be done. (There is a wealth of information on italiancitizenship.freeforums.org, btw, if no one responds here.
Next, if you decide to apply in Italy you can have your translations done in the US, but they must be legalized by a US consulate in order to use them in Italy. Also, you must have
everything apostilled and translated - including naturalization documents.
You may also opt to have the translations done by someone in Italy, but they will then need to be legalized at the local courthouse. Requirements for translations may vary by comune - usually the office in the courthouse responsible for legalizing the translations will instruct you on how to proceed.
I applied for citizenship in Italy, and had a friend do my translations. My friend was required to swear to the authenticity of the translations and then a number of tax stamps were applied to the translations in order for them to be legalized. Everything was translated, including the apostilles. (I don't believe that translating the apostille is required stateside, but my local courthouse official required it.) I also think that the cost for legalizing translations at a consulate in the US should be comparable to what you might pay in Italy. (I recall having to have one tax stamp for every 4th page - counting front and back of document.) If you need additional information about requirements for applying in Italy, just ask.
Another thing to remember...authenticating documents seems to be the norm for applicants now, even when applying in Italy. I can't say with certainty whether EVERY comuni in Italy sends your documents back to the consulate in the US for authentication, but mine did. I believe that others applying in Italy have experienced the same. So, it might be a better idea to have your translations done in the US, have them legalized and then try to have everything authenticated before you depart.
Good luck!