200 Grand St.
at Mott St.
What some consider to be the best Italian market in New York, this tiny store manages to retain its authenticity despite the cartoon that is now Manhattan's Little Italy. Best for its outstanding Italian cheese selection. Be prepared to wait. A long time.
DiPalo's is a family-run Italian market that is best for its selection of Italian cheeses. They are unique in that here you can buy Parmigiano-Reggiano in different "vintages" -- made from milk collected in the spring when the grasses are greener or the winter when the cows are eating hay. The store-made mozzarella is excellent and you choose your cheese on the basis of size (some are huge). There's a good chance it will still be warm when you buy it, it's that fresh.
The store also has a solid selection of hams, salumi, coppas, sausage, anti-pasto items, olives, and some grocery items, although you can find a better selection at other markets across the city that sell Italian charcuterie.
What to avoid:
The store on weekends when the line goes from terrible to unbearable.
What to know:
While the wait can be forever (you can take a number and then go have a cappuccino down the street, come back and still have to wait 30 minutes...), when it's finally your turn it will be like you're the only customer in the store. Tastes of everything and advice are freely offered. The shop must be on the tour because don't be surprised if while you're waiting your turn, tourists will come in, take photos, and leave.
Prices are simply okay and unless you're shopping for something special, such as a pecorino di fossa, you can do better at several other markets across the city. For instance, you can buy excellent Parmigiano for less at Fairway but it's precut so you won't get to taste it first, nor can you buy a spring vintage.