The national team has one main problem, and what I'm about to say will probably result in me getting severly flamed, probably to a crisp.
The veterans and pretty boys on the national team such as Totti, Vieri, Camoronesi, and Del Piero sometimes, (that's right, I said Del Piero) take the motivation and energy out from the team. The national team isn't significant to them anymore (although Del Piero does try hard) since they make loads of cash while playing for their clubs. Soccer isn't about playing soccer and representing your nation to them anymore; hell, it's not even a team sport to some. It's about the Ferrari 360 Modena in your driveway, the mansion you live in, the material goods. Very few players appreciate the game for what it's supposed to be; giving it their all every game, pouring their heart and soul into everything they do on the pitch. Passion. Those positive vibes spread throughout the team, and that's what wins games. Not the gargantuan payroll you have, nor the so-called "stars" you field. It's passion.
If Italy expects to go far, they need to work together, develop and work as a team. The new players who don't make as much money as the "stars" seem to be playing well. Totti seems to have come to his senses realizing that the national team is important as well, or else he just got lucky today. I see potential in the Italian squad, just add some motivation, passion, and teamwork: perhaps this could be the formula for success?