Yes. There were several actions undertaken by the Italian military during WWII where they preformed very well and impressed their opponents and allies alike. In fact, much of the poor reputation the Italian military has in WWII can be traced to a number of factors. Primarily the poor quality of their equipment, the lack of a coherent strategy and incompetent leadership. Also coloring this reputation is the fact large numbers of conscripts from the more impoverished Southern half of Italy, would surrender to the Americans when given a chance. Many of them had family in the United States and would often bring the addresses of their relatives with them when they surrendered.

Anyway, regardless of the reasons why, the Italian military (especially the Regio Esercito) did not do particularly well during the war. However there are numerous examples of the actions of individual units that are noteworthy.

The 132nd 'Ariete' Armored Division performed the very well during 1941 both defensively and offensively. In spite of the lackluster quality of Italian Tanks, the Division inflicted many casualties on British and Commonwealth forces. During the Battle of El-Alamein in 1942 the Division fought bravely until they were completely out of tanks and equipment resulting in its complete destruction. On the final stand of the Ariete, Field Marshall Rommel noted their courage and concluded:

in the Ariete we lost our oldest Italian comrades, from whom we had probably always demanded more than they, with their poor armament, had been capable of performing

So renown was the Division that their lineage was carried on Post-War, first as a Division and then as a Brigade after the Italian military moved away from having Division level organization in 1986.

The Italian Navy were also pioneers in the area of waterborne special operations. The most famous of these units, Decima Flottiglia MAS had many successful attacks on Allied Navies in the Mediterranean. They used a variety of tactics including speedboats, manned torpedoes and 'Frogmen' raids. They famously attacked the British ships anchored at Alexandria with manned torpedoes and knocked out enough ships that the Italian Navy briefly had the upper hand in the Eastern Mediterranean until repairs and reinforcements swung the balance of power back towards the British. However, after the armistice members of the unit that were located in Northern Italy reformed the unit and joined the new German puppet government of the Italian Social Republic. Decima MAS was used almost entirely in anti-partisan operations and committed many massacres and acts of terror against civilians.

Also noteworthy was the performance of the 185th Paratrooper Division 'Folgore'. Like the Ariete, they fought especially hard at the Battle of El-Alamein. Outnumbered, they used creative tactics to draw the enemy into vulnerable positions and would then attack on all sides. Sometimes with Molotov Cocktails and other improvised weapons. Time's correspondent on the ground reported that:

In the south, the famed Folgore Paratroopers Division fought to the last round of ammunition

Also like the Ariete, their lineage was carried on postwar by the Italian military as a Brigade.

But my personal favorite story is that of Amedeo Guillet and the war in East Africa. Known by the British as "The Devil Commander" he is sometimes referred to as the Italian Lawrence of Arabia. Guillet came from a noble family with a strong tradition of military service. He was first sent to East Africa in 1936 where he was wounded and decorated for bravery. He also served in the Spanish Civil War as part of Italy's intervention on behalf of Franco.

When the war started between Italy and the Allies, He was back in East Africa where he commanded a group of Italian and Eritrean cavalry. While only officially holding the rank of Lieutenant, Guillet commanded 2,500 men. A command given to him by the Viceroy of Italian East Africa, his friend the Duke of Aosta. His group was noteworthy for not only their daring raids on horseback where they would often attack British armor head-on, but also their fair treatment of the local population. So much so that although his whereabouts were oft well-known by the civilians, never once was he betrayed and he evaded capture throughout the entirety of the campaign. The Devil Commander became a legend among the British forces throughout the campaign. His strategy of attacking tanks on horseback with handheld bombs and "gentlemanly" reputation lead them to refer to him as a "Knight from another time." Like Lawrence he learned the culture and customs of the area he was operating in. Studying the Koran and the style of dress, twice he was able to avoid capture by disguising himself as Arab.

In 1943, Guillet was back in Italy attempting to secure money and supplies to continue his war when an armistice was signed with the Allies. A committed monarchist, Guillet's loyalty to the King was unshakable and he served in the Co-belligerent Italian Army. Where he was promoted to Major and assigned to work with one of his former opponents in East Africa, Major Max Harari of the British Army who had previously been tasked with capturing The Devil Commander.

After the War, Italy became a Republic and Gulliet was planning on leaving the country when it's last King, Umberto II ordered him to stay and serve the country no matter if it was a monarchy or not. He couldn't refuse the King so he served as a Diplomat for many years and died in 2010 at the age of 101.

Atkinson, Rick. An Army at Dawn: The War in North Africa, 1942-1943. Detroit, MI: Thorndike Press, a Part of Gale, Cengage Learning, 2013.

https://www.webcitation.org/5iVZnyaAi?url=http://www.avalanchepress.com/Ariete.php

http://www.avalanchepress.com/FolgoreAtAlamein.php

http://www.esercito.difesa.it/en/History/Pagine/Lieutenant-Colonel-Amedeo-Guillet.aspx