I respond this as a very AA-specific question, because checking-in at MXP for an IB flight and an AA one are two completely different things and warrant two very different answers.

If you're flying AA, if you're in business class arriving 90 minutes before is fine (that's when I get there) due to faster check-in and a quick airport-operated FastTrack security. In economy, as others said, you need 120-150 minutes; less if you're elite (due to faster check-in), a bit more if not.

Keep in mind that FastTrack security is an airport thing, and it's available only to ticketed business class passengers and not to elites.

AA's check-in is at the end (arriving by car) of the terminal, in a secure area guarded by police which will check your passport and ticket/itinerary (have them ready) before allowing you in.

MXP has some incredible AA people working there, extremely courteous and efficient and, as old3 remarked, very professional. It's one of the best run stations in the system by far, especially when considering that the airport is very poorly run and its infrastructure quite lacking.

The lounge is BA's Terraces Lounge, which is not crowded at all at that time and offers a full continental breakfast (including cappuccino) and a selection of free newspapers to take with you but no Wi-Fi.

As Italy is prone to strikes, a good site to check often is http://it.notizie.yahoo.com/approfon.../scioperi.html (in Italian; use Google Translate or similar if needed)

Get a seat on the right side for the view of lago Maggiore, Monte Rosa, Cervino/Matterhorn, parts of the Mont Blanc, the Sion valley, Lac Léman/Geneva Lake etc. (and at times Paris) on a typical departure. It's a spectacular sight.