Back in April of 2006, my wife and I rented a car in Dublin (didn't need one in the city, we took a bus around town and out to Trim Castle ), and drove out to Au Daingean (aka the Ring of Dingle... the gaelic term sounds better) in a day I believe. Not sure how much has changed but my two cents...
* We got socked with an extra insurance charge on our car rental. We had started our trip in England and our credit card had enough protection on it there but in Ireland it did not due to the "hazardous roads" or something of that nature. Frankly, they weren't any worse in England than in Ireland.
* Be prepared to drive a stick. I drive one here and the states and wanted one there, but I think their automatic options are limited.
* Be prepared to not necessarily make "good time". Right out outside of Dublin was the most Interstate-y of our driving (i.e. multiple lanes/higher speed limit). Once outside this, it seemed to take forever. I liken it to driving to the beach in NC and only be able to take state roads- passing through every small town. We had already been in England and had seen our fair share of the country side, so the quaintness was wearing off. For you, starting in Dublin, it probably would be pleasant, especially if you have a 7 days. There are probably neat places to stop along the way - we wanted to get to the other coast.
* With driving on the opposite side of the road, it requires much more concentration. We had no serious driving issues but again, the things you take for granted in the states, can't be taken for grant overseas (like making a right on red).
Overall, if I had to do it again, we would rent a car.