The "origin myths" of the Romans, which they apparently believed and then passed down to us, have little if any relation to historical fact. The Romans may have been influenced by early seafaring wanderers (as in the Aeneas legends perpetrated by Vergil) but the vast majority of Roman patrimony was undoubtedly locally derived. As various tribes were conquered, their cultures were assimilated into what became Roman. But one group clearly had an overwhelming influence, which was acknowledged, although sometimes ruefully, even by the Romans.
The ancient traditions record a period of Etruscan rule at the end of the Roman monarchical period, and the Republic is said to have achieved its independence when it defeated the allies of the last (Etruscan) king of Rome. The Romans themselves attributed a number of the symbols of their magistrates to the trappings of Etruscan kings, and Roman political and religious practices were strongly influenced by the Etruscans. Early Roman art and religion were also strongly influenced by the Etruscans, and the Romans seem to have developed their writing system from them. While the Greeks had a strong cultural influence as Rome developed, the Etruscans had a more pervasive and immediate influence in the early days. So to understand the Romans, we have to know about the Etruscans.
One of the most important things to know remember the Etruscans is that they originally were identified geographically. Etruscans to "Political Rome" were simply all of Rome's enemies who originally occupied the area north and west of the river Tiber up to the River Arno, what the Romans called Etruria. The Etruscans later expanded south into Campania and northeast toward the Po Valley, and there, also, the Romans had to deal with them. The Greeks called these same people Tyrrhenoi, and the sea, which the Greeks crossed to meet them, was the Tyrrhenian Sea, a name that has stuck until today. The Etruscans are thought to have called themselves "Rasne" or "Rasenna" of some variant, but it is by no means clear whether they delimited themselves geographically.
Today, in contrast, Etruscans are identified linguistically: people of the Italian peninsula and Islands that spoke their unique non-Indo European language are considered to have been Etruscans. The evidence for this language is found in thousands of inscriptions, but almost all are formulaic funerary or dedicatory inscriptions of little content. Only a few longer texts are preserved. The nature of the evidence is such that, while the gist of most funerary inscriptions can be made out, the longer ones are often unclear in many respects. There simply isn't enough documentation or translation into known languages to allow for a very detailed understanding, though the general outlines of the grammar are clear enough. The problem with the Etruscan language is not really that we can't read it, but rather that we really just can't find enough to read.
The great unanswered question is, where did these people come from? Herodotus, a Greek historian writing in the late 5th century BC, says (in Book 1 Chap. 94), that the Etruscans came from Lydia, an area of western Asia Minor, modern Turkey. According to Herodotus, before the Trojan War, there was a great famine in Lydia that went on for 25 years. Finally, the king decided to split his people in two, half staying to try to survive on dwindling food reserves and the other half required to leave and find sustenance elsewhere. The King's two sons drew lots to see who would lead the emigrants, and the "unlucky" lot fell to Tyrrhenos, who led them to Italy. (In the sequel, the Lydians who stayed died of hunger and the "unlucky" Tyrrhenians found the fertile Tuscan valleys.) The details of the story are clearly unreliable. The Trojan war was dated by the Greeks to the early 12th century BC, and by the time of Herodotus there were no reliable records for this period, only myths. (Also, the Etruscans were called Tyrrhenoi by the Greeks, so the name of the leader of the expedition was made up to explain the name of the people. It was a common practice to make up a name for the founder of a people or city on the basis of the people's or city's name and then say that the founder gave his name to the people or city. This probably also happened with Rome, whose name was said by the Romans to be derived from the name of Romulus, its mythical founder, rather than from "R(e)ma", which is thought to have been the Etruscan name for the Tiber River.)
Dionysius of Halicarnassus, who wrote about the Etruscans and early Rome at the end of the first century BC, argued (Roman Antiquities, 1:30) that the Etruscans were autochthonous, that is, that they were the original inhabitants of their territory.
Some modern theorists have accepted Herodotus theory of Lydian (or at least Middle Eastern) origin. This is based, in large part, on an inscription dating from about 600 BC on the Aegean island of Lemnos written in a language clearly similar to Etruscan. Thucydides, a contemporary of Herodotus, wrote that the pre-Greek population of the island was Tyrrhenian (Etruscan). Perhaps on this island there was a holdover of the population from which the Etruscans emigrated to Italy, or perhaps the Lemnian "Etruscans" were left behind there during the westward migration. (Opponents say the 600 BC date is too late, and that the inscription is more likely to have been left by later Etruscans from Italy exploring eastward.)
There certainly were early Middle Eastern influences. The Etruscan practice of hepatoscopy, divination through examination of the livers of sacrificial animals (part of the larger "specialty" of hauroscopy, which also used other organs), is alien to other Italian peoples but is common in the Near East. Modern "orientalizers" argue that these the Lydians (i.e., generic Middle Easterners) need not have been mass invaders who supplanted the locals, but groups of males seeking land (and mineral resources?) who settled among the more primitive locals, intermarried with them, and provided leadership for them. Eventually, the locals adopted the language of these new arrivals. These incomers, therefore, would not directly affect the local material, so they wouldn't leave any record of their arrival through the immediate introduction of some new form of artifact like, for example a new style of pottery. The Normans in England, the Vikings along Russia's internal rivers, and the eastern (Vistular) Hanseatic knights are more recent and better documented examples of this kind of occurrence of great cultural change accompanied by little immediate material change -- no clearly identifiable change in artifacts. It is argued that the Etruscans arrived around 800 BC, and their arrival is the "leaven" that causes the precipitous increase in the level of culture in the Orientalizing period. There are, of course, problems with this theory: there is no evidence for their arrival, and the comparison with the Normans and others is simply an attempt to explain this away; there is no indication in the archaeological record (artifacts) of any change in population or practice apart from the shift in locations of sites at the Proto-Villanovan/Villanovan divide (ca. 900); and the same general developments in the advance of culture are visible in non-Etruscan-speaking Latium. The basic tenet of the "Lydian" theory is that these people only started being real "Etruscans" at the time of some "oriental" arrival.
The competing modern theory is that Dionysius had it right: the Etruscans were a remnant of the original, non-Indo-European inhabitants of Italy ("autochthonous" here meaning "there from the beginning"). The much larger Etruscan ethnic group were thus swamped by the Indo-European invaders and maintained themselves only in the area between the Arno and Tiber. Etruscans were the long time residents, i.e., the culture that is now known as Villanovan (named after the modern Italian site, Villanova di Castenaso, east of Bologna, where it was first identified in 1853 excavations) who may have been subject to oriental or Greek influences, but were certainly not those orientals or Greeks. This theory does not explain the continuities and discontinuities in funerary customs. Some folks say that cremation was a defining characteristic of "Etruscanism", and maintain out that the Villanovans practiced inhumation rather than incineration. Changes in burial customs are usually considered marks of cultural dicontinuity. Also, there is no evident earlier tradition on which to base the "autochthonous" theory of Dionysius of Halicarnassus -- he may have been just guessing.)
Some Italian Etruscologists (especially Massimo Pallottino) attempt to argue the problem away. They wish to turn away from the question of the "provenance" or "origin" of the Etruscans, and instead discuss the "formation" of the Etruscan "nation". This isn't very satisfying, and it begs the issue. The Etruscans are considered immigrants from the east, but their arrival is shuffled off to the "remote pre-historic times" (where there is no real evidence for it). The suggestion that they may have arrived in the late Bronze Age would suggest that they are the proto-Villanovans from whom the Iron Age Villanovans developed. The problem with this theory is that there is neither literary nor artifactual evidence to support it.
We are, in all cases, left only with imagination. If the Etruscans knew where they came from, if they recorded their origins, the knowledge and records were lost or destroyed. We can imagine a pre-existing culture that was somehow "Etruscan", or we can imagine oriental "Etruscans" arriving to displace or remake a pre-existing culture, or we can, like the Italian Etruscologists and their partisans, imagine a "fermentation," by which "Etruscanism" bubbled up out of the rich broth of everyone who happened to be in the geographic territory where the peninsular "Etruscans" lived. The latter, of course is what political Rome did when they identified their Etruscan enemies.
Herodotus, Dionysius (and Strabo): http://www.ncl.ac.uk/classics/teaching/cah313/sources1.html
Becoming obsolete -- not keeping up as web links change -- but still very useful: http://www.vcrlter.Virginia.EDU/julia/etruscan/
The Mysterious Etruscans: http://members.tripod.com/~Centime/Etruscans/sitemap.html
Larth the Etruscan's guided tour: http://www.agmen.com/etruscans/pag_engl/index.htm
Etruscan Language: http://ancienthistory.about.com/cs/etruscanlanguage1/
Etruscan Links: http://humanities.byu.edu/classes/ital420/Etruscans/
Go to http://www.mmdtkw.org/Veneto2001.html for other articles.