Items are found in the "?" cubes. If you're in last place you usually get items that allow you to skip ahead or thwart other players from beating you. if you're first you  get the useless items, such as green shells and bananas.

Items:
Banana: Allow you to throw/drop it behind you, if a player runs into it they spin-out 2-3 times.
Triple-BananasGreen Shell: Allow you to throw in front of/drop behind you and travel at 2x the speed of the player in front or behind you to get hit by one and flip once, causing them to stop and speed up again. If it runs into a wall or some other object it stops and disappears.
Triple-Green Shells
Red Shell: A shell that is like a "homing device" that finds the player in front of your, makes them flip, stop, and speed up again. If it runs into a wall or some other object it stops and disappears.
Triple-Red Shell
Blue Shell: A homing device used for stopping the player in first or the next one to finish. It will not miss, it's a guranteed hit.
Fake Block: A block that, when run into, makes the player flip, stop, and speed up again. You can place it where there are common places to turn or where there are 2 or more "?" cubes to assure that a player will hit it.
Bullet Bill: Allows the player to speed ahead 4x the normal speed for approximately 5-10 seconds.
Lightning Bolt: A lightning bolt put upon each player, except the user, and makes them smaller in size, which makes them much slower. Once hit by the lightning bolt,  you lose your currently held item.
Squid: A squid that squirts 2-3 blotches of ink on the screen making the player's visual hard to see.This can be evaded if you have a mushroom.
Mushroom: A mushroom that allows the player to speed ahead for approximately 2 seconds.
Triple-Mushroom
Boo: A ghost that steals your currently held item, whichever one is better is given to the user.
Max Mushroom: A golden mushroom that allows you to speed ahead, you can repeatedly press the a button to speed up even longer.