I just got off the phone with Apple support and did the user account thing and the problem went away. The only problem now is everything including my entire library is on the other account. I use Iolo System Mechanic pro for my security software. I never had this problem till the 2.0.2 (5C1) download.
I believe the the new user fixes the issue due to the fact that none of the preexisting files are being used . So there must be a conflict or corrupt file some where in the original iTunes directory that is not removed and or replaced during a reinstall. I will try this
http://support.apple.com/kb/HT1275 and see if that works.
I think it might be a corrupted back up and uninstalling apple mobile device support and removing any remaining files could solve the problem.