Ok so based on this I did something like the following:
var mockProvider = MockRepository.GenerateMock<IItemProvider>();
var target = new ItemService(mockProvider);
Item testItem = null;
mockProvider.Expect(c => c.SaveItem(Arg<Item>.Is.Anything))
.WhenCalled(call =>
{
testItem = (Item)call.Arguments[0];
});
target.SaveItem(item);//item initialised elsewhere
Assert.AreEqual(item.Id, testItem.Id);