BLUE SCREEN of death - solution
Go to Start > Control Panel > Add or Remove Programs
Find the Logitech Camera Driver and uninstall it.
This did the trick for me. Finally -- I had tried all kinds of other things. After I did this, the iPhone still got recognized as a "Digital Still Camera," but no BSOD. What happened instead was that another balloon popped up that said "Your hardware is installed and ready to be used." It then synced with iTunes as usual.
The next time I took a picture on my iPhone and plugged it in, it brought up a list of Camera/Photo programs (Canon Capture, Picasa, etc.) for me to choose from, but again, no problems with syncing to iTunes.
Hope this helps. This work for anyone else?
Dell Inspiron 9300 Windows XP SP2