Thanks for the response. I thought it may have been my nLite install, so I installed directly from a official Microsoft CD and still get the same problem.
If you have no idea what that is then you can disregard this but, from my experience xfire has caused issues with itunes for a while now off and on. Some people have issues with xfire and itunes, some dont.
But I know almost a year ago xfire would cause the exact same issue on my system, so..if you're using xfire, reboot (dont start xfire) uninstall itunes, reboot again (still no xfire), then install itunes and open it.