Here is the problem that lies within the Orchimaro vs. Itachi debate. Orchimaro clearly states that itachi is stronger then him. Itachi clearly states that Jiraiya is stronger then him. Yet Orchimaro has no fear of Jiraiya and fights him even when he has the handicape of not being able to use his arms. Here lies the dillema. Until we see them fight there really is no way to assume that one could beat the other. I think the reason why Orchimaro fears itachi so much is because he has some sort of fruiedian inferiority complex when it comes to those with bloodlines. He sees them as perfect and since he really dosen't have one he's envious and fearful of them.