I totally agree with centurion1.
I LOVE ITALY!
What you have to do with Italy is 1. Make sure you play it like a naval nation, Italy's great srengths are its right in the middle so you get a good amount of offers and almost always someone always wants to have Italy as a friend because he can be a difference maker in so many natural conflicts (Austria-Turkey, England, France...) and 2. Make sure you talk talk talk talk talk.
I love Italy, just do...I generally get a good number of fleets, diplome, and while I don't ever win (I don't win period, not yet anyway, so I don't blame Italy) I do get a lot of draws and survives, and a lot more than I get as Germany or Russia or Turkey or France.
Also- the Lepanto. Learn it, love it, and use it as a bargaining chip, for and against Turkey.
Also- the "France's Underbelly Sea Stab." Learn it, love it- and, again, England and France will bargain for your help (that's a key, really, with Italy, you have to make folks really want you as that extra couple fleets or armies to help them defeat their foe, and then you just have to stay strong enough to stand up to your allies and you've got some good hope.)
And finally- the Eastern Triangle:
-Turkey/Italy almost never works, at least not for me
-Obviously you have to decide what to do about Austria right away, but either a qucik/allied win over Austria or an agreement between you two to DMZ Venice and Trieste and Austia/Italy can be a mean force
-When all else fails, the Russo-Italian Alliance is usually a good and viable option...assuming Russia doesn't get killed so easily, of course (really just as much as you hate Italy, and as a part Russian/Pole I'm kind of sad to say this, liking Anton Chekhov and Tchaikovsky and, yeah, Mr. Chekov on Star Trek- but I just can't stand Russia, I just can't play it! I need my fleets, I really do well with fleet protection and then, if all crumbles, I have a getaway ship, so I love playing as Italy and England, and then after that Germany and Austria since while both are more land-based they have plenty of room to manuvuer and assuming there's a standard German/Austrian alliance you have at least a quiet front and potentially an ally if you really need help- Russia doesn't have the naval power I like and is so open to attack as a target...!)