I was delighted to pop by to see this old thread back again. Because I now have a different answer.
The best nation to form Italy is neither Milan nor Tuscany (and I've done it with both). It's Savoy.
As Italy, your biggest challenge is always going to be France. France is going to rival you and then attack you again and again all game. Once they get that mission to take Milan, good luck. And they'll have more manpower and forcelimit and better ideas than you do. Fun.
If you start as Savoy, however, you can cut France down to size before it gets going. Your first move is to ally Burgundy and Aragon, both of which will be happy to have you. Then you attack France as often as you can until Burgundy gets inherited. You want to take out Provence and expand into Occitania. Ideally, you will also set up a buffer state somewhere like Toulouse that you will feed border provinces so you no longer have a border with France.
By the time Burgundy disappears, you have a much weaker France that you no longer get border penalties with. You will also control most of the Genoa trade node by yourself without having to deal with France diverting your trade. If you're lucky, France won't even rival you because you don't share a direct border. Now go expand into Italy.
Over the medium and longer term, this makes for a much easier and more enjoyable game. Plus the Savoy ideas are pretty decent. Savoy was by far my favorite Italy of the three main choices. And it's historical!