My favorite Italian prog band is Goblin, the guys responsible for those great film scores (mosttly for Dario Argento's horror epics, and some other movies). They also recorded two splendid original studio albums, three if you count the one-off reunion without original keyboardist Claudio Simonetti...and THAT CD rocks, too. The pre-Goblin band Cherry Five also released one classic album, in '75.
I also enjoy Nuova Era, Apoteosi, Le Orme, Pandora, some Banco, etc. I just don't like them as much as Goblin.