This may seem like a strange question but what exactly sets the "Italian Rapier" aside from all the rest. In other words why do I see "Italian Rapier" in some places but just "Rapier" in others. Is it because they are made in Italy or is it because of the design?

Well, in general terms, nothing. The Italians had their own style of martial use, but not exactly their own unique rapier type.

That said, there are certain rapiers designs that are more common to certain regions than others. Cup hilts are an famous one, which were more popular in Spain in the later 17th century... but even those were seen outside of Spain. With rapiers, like many swords, it is hard to pin down exactly where a certain style is from because the styles were so widespread.

One can consider the term "Italian Rapier" to be used similar to the term "Italian Car". In many ways, at least foundationally, a car is a car is a car, right? Well, that's true. Looking deeper, one can see that Italian car design has a subtle, but important, philosophical difference than other car makers. The visual design of an Italian car differs than other cars, as does the performance and intended purpose of them. The same is true for the Italian rapier. The first difference is that they're made in Italy, obviously,. The other difference is aesthetic design philosophy. And the last difference is in the way they're intended to be used. These last two are often seen in Spanish designs and even Germanic designs as well: the Italians weren't the only people making a rapier intended to be used in the "Italian fashion".

How vague was that? :)

I see how it is. but was it the italians or the spanish that used their Rapiers in the circle. I know that must sound extremely vague but i have a memory block right now and can't think of the name of the circle.

The Spanish are the ones who were famous for fencing with circular footwork. Keep in mind, this didn't mean they only circled around, as many people seem to believe, but that they fought as if they stood on the outside of a circle between they and their opponent, and that stepping straight forward into the oncoming attack was dangerous. The Italians tended to be more linear, as they felt stepping around left you open to attack.