Ok. I read just about everything on in this discussion group and Apple notes.
I then declared all out war on this this evening. I won.
Here's what I did:
1. Assumption - you have Norton AV or Norton System Works installed. I suppose it will work if you have NIS installed.
2. Removed ALL my anti-spyware programs (i.e. Spybot 1.3 and Microsoft's Anti-Spyware).
3. Rebooted.
4. Opened up Norton AV settings in Norton System Works and selected Internet Worm Protection.
5. Under Applications - Added iTunes and iTunes Helper. Set operation to PERMIT ALL.
6. Under "General Rules", I added a new rule named "iTunes".
7. Under the "Communications Tab", I added a rule to allow UDP traffic to both local and remote ports 5353.
8. Rebooted.
9. This time, when the system started, I got a message indicating that "application iTunes is trying to access the internet." Clicked on "Remember and allowed the operation.
At this point, things started working.
The removal of the Anti-spyware programs MAY or MAY NOT be necessary. I will add them back in to see if they make any difference or not.
Now - Apple, my suggestion to you is to PUBLISH the ports and protocols and network targets. I was only able to gleam the ports used because Sygate indicated that iTunes was using UDP port 5353 to communicate.
Anyway, for those of you with this problem and are running ANY of the programs mentioned here, try my recommended course of action.
Charles
P.S. Now, I need to figure out what causes the occassional skip/stutter. But, my iTunes is working.