I'm having the same kinds of problems: iTunes hangs while playing songs. The clock and progress thing stop, no output at all, and then suddenly it'll pick up two thirds of the way through the song. Well, if I'm lucky. Sometimes I don't even get to hear the song.
Could this be a problem with the Quicktime upgrade that accompanied the iTunes upgrade? I haven't tried playing any movies yet.
Cool, I just found by unplugging my external speakers and then plugging them back in iTunes will play for about 5 seconds before cutting out again. Now, if I want to do that the rest of the day, I'm set.