The Fiorentina striker, whose poor form in South Africa was symptomatic of Italy's malaise, headed in a corner for an 11th minute lead having come back into the team at his home ground after being left out of Friday's opening 2-1 win in Estonia.
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Daniele De Rossi and the splendid Antonio Cassano extended the advantage at half-time before substitute Fabio Quagliarella and a perfect late free kick from captain Andrea Pirlo added the gloss to coach Cesare Prandelli's first home match in charge.
The former world champions could have scored more against the Faroes, whose population of around 49,000 is seven times smaller than that of Florence, but dogged defence denied them.
The Islanders were determined to battle hard after being upset by their training facilities in Italy, with angry coach Brian Kerr saying the grass was so high that "all the sheep in the Faroes would take a month to eat it".
Opposite number Prandelli, the former Fiorentina boss, was in a better mood after being warmly welcomed back to Florence with banners hailing his time at the club rather than criticising his May departure as authorities had feared.
"It was easy to come back because I knew Florence is a generous place and I was sure it would be like this," Prandelli told reporters.
"It was clear that for 90 minutes we couldn't keep the momentum of the first half. I expected Gilardino's goal because he had so much desire."
WRY SMILE
The stadium was not full but fans also applauded debuts for Fiorentina right-back Lorenzo De Silvestri and Florence-born Bologna keeper Emiliano Viviano before seeing Gilardino justify Prandelli's decision to bring him in for Giampaolo Pazzini.
De Rossi's deflected effort on 22 minutes raised the prospect of a rout and Cassano powerfully picked his spot from just outside the area to make it three soon after.
New Italian federation technical chief Roberto Baggio, arguably Italy's most famous number 10, watched in the stands with a wry smile as the creative Cassano again showed he might finally be ready to be a veritable heir to the Divine Ponytail.
Cassano, the one-time bad boy of Italian football, was the architect of the comeback win in Estonia and has matured markedly of late thanks to marriage and impending fatherhood.
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