I believe it is essentially slang, not meant to be interpreted literally. For example another common expression is "In quattro e quattr'otto", which literally translated means "in four and four eight", which doesn't really mean anything literally, but idiomatically means "quickly".
(native Italian) your interpratation is right, Let me only correct your litteral translation: "Between word and deed there is a sea in the middle" (essere di mezzo = be in the middle, be median).
Thank you for sharing the english idiom: it's very usefull for me. Can I ask you what does "twixt" exactly mean?
Twixt is short for betwixt, which is itself an outdated word for between. I assumed it was Shakespeare (as usual), but it looks like it's older than that. http://en.wikipedia.org/wiki/There's_many_a_slip_twixt_the_cup_and_the_lip
Thanks for correcting my Italian. I am a beginner! Betwixt is an archaic form of between. Earliest reference I can find is in the 16th century. Twixt still survives in proverbs and sayings like this one.
The phrase "betwixt and between" means neither one thing nor the other".
there is little difference: in Italian we have the same idiom you wrote: "I fatti contano più delle parole", it is similar but not the same. If you talk about honest thing, but you never do that.. so you can say "actions speak louder than words". When you dream on, but you haven't resources enough for doing what you wish.. than you say "tra il dire e il fare c'è di mezzo il mare" it is more "soft" expression.