Not too many books and other sources of information on italian prog, especially for non-italian language readers.

Here are some of my main sources of information, starting with the italian ones:

ENCYCLOPEDIAS AND DISCOGRAPHIES

• Paolo Barotto - Il ritorno del pop italiano (5th edition - self produced 2003) - in italian, but an older english version exists, updated to 1997
• Paolo Barotto - 100 foto storiche (self produced 2003) - great black & white pictures of 70's artists
• Paolo Barotto/Marco D'Ubaldo - Rock progressivo italiano - The complete discography (Mediane 2006) - a nice (and heavy) photographic book, with full discographies on the italian progressive of the 70's - includes a 15-track CD sampler of this style
• Valentino Flesca - Il pop e progressive in Italia (self-produced 1995)
• Cesare Rizzi & others - Enciclopedia del rock italiano (Arcana 1993)
• Davide Motta Fre' - Promesse d'amore (self-produced 2006) - a nice and very detailed book, with pictures and discographies, on the italian melodic groups of the 70's
• Alessandro Gaboli/Giovanni Ottone - Progressive italiano (Giunti 2007) - a pocket guide on the italian prog albums, detailed and in full colour

ESSAYS AND STUDIES

• Francesco Mirenzi - Rock progressivo italiano voll. I & II (Castelvecchi 1997)
• Piersandro Pallavicini - Quei bravi ragazzi del rock progressivo (Ritmi Theoria 1998)
• Pio De Bellis - Ricerche per una apoteosi del pop italiano (self-produced 2000)
• Umberto Bultrighini/Gianni Oliva - Dopo i Beatles: musica e società negli anni settanta (Carabba 2003) - the proceedings of a 2001 meeting on music and society in the 70's, with interesting contributions by PFM members Mussida, Di Cioccio and Djivas
• Innocenzo Alfano - Fra tradizione colta e popular music: il caso del rock progressivo (Aracne 2004) - an academic introduction to the progressive rock, also including some pages dedicated to the italian 70's scene
• Innocenzo Alfano - Verso un’altra realtà (Aracne 2006) - a study on the methods of composition used by rock musicians, the book also contains a part specifically dedicated to progressive music
• Giordano Casiraghi - Anni 70: generazione rock (Editori Riuniti 2005) - interviews with the main witnesses of those years, also includes a part on discographies, but rather incomplete
• Saverio Angiolini/Enzo Gentile - Note di pop italiano (Gammalibri 1977) - now difficult to find and highly questionable in their statements
• Al Aprile/Luca Mayer - La musica rock-progressiva europea (Gammalibri 1980) - now difficult to find and with few italian artists
• Riccardo Storti - Progressive in Italia (Associazione Nonsolomorego/CSPI 2002) - historical review of the italian prog evolution
• Riccardo Storti/Donato Zoppo/Paolo Carnelli - Racconti a 33 giri (CSPI/MovimentiProg/Wonderous Stories 2003) - detailed reviews of 50 essential italian LP's
• Lodovico Ellena - Storia della musica psichedelica italiana (Menhir 1998)

BEAT, SIXTIES, EIGHTIES

• Giovanni Berti - Catalogo dei 45 giri del beat italiano (Paludi 1998)
• Paolo Dovico/Luigi Riganti - Vinile italiano (Self produced 2002) - great work, mainly concentrated on punk/wave/indie, but there is some prog too
• Tiziano Tarli - Beat italiano (Castelvecchi 2005 - updated 2nd ed. with bonus CD Castelvecchi 2007) - not specifically on the 70's prog music, but an enjoyable reading on the italian youth and society in the 60's. The 2nd edition includes a bonus CD with 14 original tracks from "Beat masses"
• Claudio Pescetelli - Ciglia ribelli (I Libri del Mondo Capellone 2003) - as above, this is on the 60's all-girl italian beat groups, but an interesting book useful to understand the italian youth of those years
• Claudio Pescetelli - Una generazione piena di complessi (Zona 2006) - a detailed guide on the italian beat groups until 1970
• Roberto Iurza - Il beat..cos'è (Puleio Press 2006) - a history of beat in Italy

MUSIC IN THE CITIES

• Renato Marengo/Michael Pergolani - Song 'e Napule (RAI-ERI 1998) - rock and prog in Naples
• Renato Marengo/Michael Pergolani - Enciclopedia del pop rock napoletano (RAI-ERI 2003) - updated story of rock and pop in Naples
• Giampiero Bigazzi/Ernesto De Pascale/Bruno Casini - Firenze sogna! Itinerari musicali 1976-1983 (Materiali Sonori 1993 - includes audio CD) - the rock scene in Florence
• Bruno Casini/Ernesto De Pascale - Anni di musica - Itinerari musicali in Toscana dal 1960 (Materiali Sonori 2003 - includes 2 audio CD's) - the rock scene in Florence and Tuscany, mainly in the 60's and 80's
• Luigi Di Fonzo - Il rock in Abruzzo (EcamLab 2000) - history of rock and prog in Abruzzo since the early 60's
• Andrea Tinti - Enciclopedia del rock bolognese (Punto e Virgola 2001) - mainly focused on the 80's and 90's artists
• Riccardo Storti - Codice Zena (Aereostella 2005) - a great in-depth analysis of the rock in Genova since the late 60's, with interviews and discographies
• Gianpiero Madonna - I Beatles e i Genesis in Canavese (Lampi di Stampa 2005) - a nice booklet on the diffusion of rock in the Canavese area, between 1962 and 1974, with all the groups and the musical events of those years

GROUPS AND ARTISTS OF THE ITALIAN PROGRESSIVE

• NEW Riccardo Storti - New Trolls: dal pesto al sushi (Aereostella 2008) - The story of the most popular group from Genova and one of the most important and well-loved bands in Italy
• Banco Music Club - ...e mi viene da pensare (Banco Music Club 2006) - An illustrated book with all the lyrics and discography of Banco del Mutuo Soccorso, by their Fan Club
• Oronzo Balzano - Le Orme - Il mito, la storia, la leggenda (Bastogi 2007) -  All about one of the most important and loved italian prog groups
• Gian Piero Trifirò - Storia e leggenda (Orme Music Club 2006) - 300 pages with the story of Le Orme!
• Giovanni Aloisio - Goblin (Un Mondo a Parte 2005) - Everything you may want to know about Goblin
• Alessandro Pomponi - Franco Battiato (Coniglio 2005) - An illustrated discography, rich of colour pictures and details
• Franco Fabbri -  Album bianco (Arcana 2001 - updated 2nd ed. Arcana 2002) - Stormy Six guitarist traces a story of his band and the whole "italian pop" scene. Very interesting
• Franz Di Cioccio - PFM Due volte nella vita (Mondadori 1996) - PFM story written by the band's drummer
• Donato Zoppo - Premiata Forneria Marconi - 1971-2006, 35 anni di rock immaginifico (Editori Riuniti 2006) -  A very detailed history of one of the most important italian rock groups of all time
• Carmine Aymone - Osanna / Naples in the world (Afrakà 2001) - the story of Osanna with details on other Naples connected bands
• Carmine Aymone - Je stò ccà.....James Senese (Guida/Suonidelsud 2005) - The story of the leader of Showmen and Napoli Centrale, with a bonus 6-track CD 
• Gianpaolo Chiaricò - Area / Musica e rivoluzione (Stampa Alternativa 2005) - The story of Area, with interviews and detailed analysis of their record production, includes CD "Parco Lambro 1976"
• Compagnia dell'Anello - Altre storie (Compagnia dell'Anello 2006) -  All the lyrics from their 3 albums "trilogy" in an illustrated book on Compagnia dell'Anello
• Cesare Monti - Lucio Battisti e la Numero Uno (Zargo 1999) - Nice photo book with the story of Numero Uno label

here's a couple of english written books on the subject:

• Dag Erik Asbjornsen - Scented gardens of the mind (Borderline - UK 2000) - in english, with a large chapter on italian artists
• Thierry Sportouche/Jacques Toni - Storia di un minuto (Acid Dragon - France 1994 - a small booklet that could serve as a good introduction for the novices)

and a japanese one, containing black & white pictures of all the records described, but difficult to understand for non-japanese readers:

• Encyclopedia of Italian rock (Marquee - Japan 1993) - in japanese with english titles