Last home team to win the European Championships? France, 20 years ago (I remember the final quite well for some reason - great French team with Platini, Tigana & Giresse). I think the two things which work most against the host nation are:
1) Lack of competitive matches beforehand.
2) Huge expectancy from home support.
BTW I can't stand the Portuguese goalkeeper, Baia. I'd like to see a team put about five past him.
I think Italy will win it, which is more due to a process of elimination than any other logical thinking. Here are the teams elimated from winning it, and why I don't think they can win it:
France - Best players, depth of squad, but with a manager who is in such high demand that he's going to Spurs? Really?
Holland - Dick Advocaat's in charge, anything can happen! There's a reason they needed a play-off to reach the finals, they have an uncanny ability to self-destruct.
Germany - Too weak at the moment, another iffy coach (Rudi Voller).
England - We always disappoint at the European Championships. When was the last time we got past the group stages when we weren't on home soil? Err, anyone?
Portugal - See above.
Spain - Always disappoint on the big occasion.
No-one else is strong enough to win it in my opinion, although I wouldn't be surprised if one of the other teams was one of the semi-finalists.