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Question: To get German units from Italy to Libya, would I use strategic movement and use Italian cargo ships to ship German units? Or would I do that in the Italian turn? If I wanted to load a cargo ship with a German unit, would I do this in the German turn or in the Italian turn?
One more question: When using the button to give a unit to another country, say a German unit to Italy, does the german unit stays German and just reverts to Italian control?

You can not use allies transport units or pool. When a unit is given to an ally they remain the country of origin but are under control of the new power.

The only way to get German units to Libya minus a land connection is to have naval transport in the med that is German or to transfer the German units to Italian control ship them then revert back to German control.

Thanks Two Tribes. I thought it may be something like that. Germans to the rescue in N. Africa!

Fastest way is probably to give Italian cargo ships to Germany in a German Headquarters in a port in Italy. Then ship material to that headquarter for shipment to Libya.