What's common practice there which would seem strange to others?
I would say that many properties which characterize Italy are known in an almost worldwide fashion. Perhaps though a native might be able to describe much better certain typical nuances.
Let's see, italians tend to gesticulate a lot whenever they (we) speak. I don't think this characteristic is shared by any other european population, although I have observed many chinese people with the same tendency (especially women). So, this can make us appear more extroverted than we really are, and might also confuse anyone which isn't used to this type of nonverbal communication.
Another "common practice" which might seem strange is our hatred towards hierarchical rules (i.e. rules which are set by the State). At the same time, though, I would say we are quite respectful of social rules, so this behavior might not be perceived unless there's an explicit situation where a law is present.
What defining characteristics does the country have?
Pizza? Ahah just kidding (although it's true, we do eat pizza rather frequently). I'd say Italy is an extremely family-oriented type of society. People tend to be attached to whichever place they have grown up in, which means that mobility is often sentimentally difficult due to purely emotional reasons (moreover, many places offer beautiful scenery, nice food and a peculiar culture/dialect). This trait seems to be largely absent in any society with anglo-saxon or germanic background.
As much as Italians aren't assigned to this stereotype, we are quite perfectionistic and frantic, compared to many other european populations. Whatever we do, we think it's bad / worthless / could be done better, so we tend to suffer a strong sense of inferiority towards other western european nations, many of whom are proud of almost whatever they do. Our perfectionism, however, is rather peculiar: we are extremely demanding whenever we are accomplishing a complex or novel task, yet we are quite lax whenever the issue at hand is "minor". Obviously this can generate quite a lot of chaos, since a large number of sloppily executed minor tasks can lead to major disruptions. That's why we are frantic and can work very quickly: we often need to deal with crisis situations.
We generally love to travel, and can be very noisy when compared to your average traveler. I don't know exactly why, generally we tend to be much more civil when we're at home.
I won't mention politics since my personal experience is that most people do not come in contact with anything that has to do with politics. They are an "elite" completely separated from the general population.
Italy is often stereotypied as being religious, however most people below 60 don't go to church, don't pray, and generally do not think about anything religious during 99,9 % of the time. We do have many curches, though, and I believe you can still feel a certain catholic background in our stances towards certain phenomena (ex. being against legalized prostitution). As far as open-mindedness goes, big cities tend to be quite open-minded, especially in central and north-western Italy. Smaller towns, especially in the north-east, much less so. Culture is generally regarded as being important, yet we're also extremely critical towards any level of erudition: if you're extremely uninterested in anything cultural, you will be perceived as likely to go nowhere in life; if you're extremely well-read, you will be perceived as a smart-ass which wastes his time reading; if you're average, you're just average so it's not good, you should do better.
Do people from your country have a stereotype to be measured against and if so how do they measure up to it in general?
I'd say the typical italian-mediterranean stereotype is only valid in one city (Neaples). Most other places do not strongly differ from the average european standard. However, we do go out at night, have dinner relatively late (depends on the season, too), try to take life not so seriously, use lots of olive oil. So perhaps I just can't see it lol