I can see that this game will be great once they get the kinks worked out. Playing as England I landed at Palermo, drove up the Boot and eventually, after 12 hours of play, Annexed Italy. The game gave me Rome and the lower half of Italy, but all my troops were in the Northern half. The Northern half was Axis and being deep in enemy territory my divisions were out of supplies and surrendered within a day. WTF.
I took note of all the Victory provinces and loaded a save game. This time i made sure to have a division in each of those provinces the next time the surrender event fired. When the surrender happened I was once again deep in enemy territory, but I owned the new Italian capitol and all the worthwhile provinces. This time, after the day had passed, the new italian regiime that my troops were in surrendered a second time. This time when I annexed the top half, the bottom half went to the allies, as a puppet regime of England and the top half switched to my ownership.
That was a pretty messed up series of events, but nothing to do with the core game play. Just a scripted set of events gone horribly wrong.