If I remember correctly, Pacino knew very little (if any)Italian. Michael's character was easily accepted not knowing much Italian.
As far as DeNiro, when you think about it, he really had to learn it (at least to a point) in order to play his role convincingly. Young Vito came right from Sicily, speaking only Italian. I don't think there was any way around having the character not speak at least some Italian in the film.
Although I don't speak Italian, I'm told that Deniro does a pretty good job. I know some of his facial expressions and mannerisms seemed right on target too.
TIS