I use the Italian game opening a lot and I have encountered people defending with h6 somewhere in the first few moves. This doesn't seem to do much for black's developement, anyone have any ideas why this is used, and any ways that white can take advantage of this move?

They're afraid of Bg5, or Ng5.

It's too slow -- just develop quickly and you'll usually get an advantage.

a6 on the other hand is often a useful move in the quiet italian game lines. 

I haven't had a6 used against me yet

1.e4 e5 2.Nf3 Nc6 3.Bc4 h6 4.d4! and black will struggle to survive and gain counterplay.

The problem is that 3...h6 is too slow allowing white to increase the pressure.

Well, thats not the main reason the main reason is that they don't want to get backrank checkmated

both of them.. but the second one does not make much sence, esp. if you have 2 rooks and maybe Q on backrank.

yeah a bit early to worry about backrank mate.