As we all know Mussolini decided to stay neutral in 1939, and although his exasperated the Fuhrer it was (as Mussolini's decisions go) a smart one as the Italian military was nowhere near ready for war.
However, keeping in mind that the Duce was never fully as committed as his German pal to a new European order and had earlier in his life dismissed him as a nobody and even threatened him over Austria, let's say that he decides that, for whatever reason he doesn't want a Second World War. POD is August 25th 1939 and by this stage it's pretty obvious what is going to happen. Mussolini tells Hitler that an attack on Poland means Italy declares war and expects Hitler to back down like he did over Austria.
What does Hitler do? Does he, in a blind rage at this betrayal attack anyway? Or does the coalition against him seem now too vast to go ahead? Keeping in mind most of the invasion preparations are by this stage complete.
My own thoughts are that if the invasion happens and Italy joins the Allies (let's say in return for some colonial territories as compensation) the main military change will be that a few French divisions are available in 1940 that weren't earlier. The Italian front goes nowhere, and Italy is occupied some time in 1940/1941.