iPhone 1.0 upgraded to 2.0 cant connect to iTunes

alright i got an old iPhone i bought a few months ago,

I updated to iTunes 7.7, wait for rush to die down and downloaded 2.0 just fine, 2 times in fact.

Now i have restored my iPhone several times with 2.0 seems after i either install apps or synce music the next time i go to reconnect the iPhone it freezes itunes.

now once i disconnect the cable from my iPhone itunes unfreezes and for a fraction of a second i see the summary page for my iPhone and the icon in the devices list before iTunes realizes i pulled the plug and clears the screen.

I am Running Vista ultimate on an HP laptop with all available upgrades and updates to hardware and software.

Does any have a solution to this issue or should i downgrade to 1.1.4