If you are running win 7, i had this problem come up when i updated my itunes 10.7, btw it now runs like a dog, on slighty older hardware in win 7, hopefully version 11 fixes this!!!!!!
Go here, apparently firewall settings for itunes can be reset, so you need to add back in udp access, and change it to public.
I have similar issue since a couple of days, since I moved my AirPort Express to a new place. I simply can not connect to it or when I do succeed it skips constantly! BUT: When I connect with AirFoil or Radium radio (which both use Airplay) it works PERFECTLY!!!!! What could be wrong? Would be great having a solution!!