Alright,
How did upgrading to the latest version of iTunes go? Did it help any? No, dang! sorry getting ahead of myself I don't even know if it has or not. I have been racking my brain trying to recreate this issue but am having no luck. I did however find a computer running xp sp2 to do some test and such on it.
Here are some more ideas that my wife and I came up with for you to try,
1. In iTunes go to (Help)/(Run Diagnostics) in the menu bar (In my opinion you don't need to do the test for (cd/dvd) or (network) but that is up to you. After which I request that you copy and past the report like so:
**************************************************************
Microsoft Windows XP Home Edition Service Pack 3 (Build 2600)
Gateway W3107
iTunes 8.0.2.20
QuickTime 7.6
FairPlay 1.1.11
CD Driver 2.0.7.5
CD Driver DLL 2.1.1.1
Apple Mobile Device 2.1.2.7
Bonjour 1.0.6.2 (118.5)
iTunes Serial Number ######
Current user is an administrator.
The current local date and time is 2009-03-01 20:47:13.
iTunes is not running in safe mode.
Video Display Information
NVIDIA GeForce 6100
** External Plug-ins Information
**
No external plug-ins installed.
** iPod/iPhone Connectivity Tests
**
iPodService 8.0.2.20 is currently running.
iTunesHelper is currently not running.
Apple Mobile Device service 2.12.33.0 is currently running.
Universal Serial Bus Controllers:
Standard OpenHCD USB Host Controller. Device is working properly.
Standard Enhanced PCI to USB Host Controller. Device is working properly.
No FireWire (IEEE 1394) Host Controller found.
Connected Device Information:
Jarvis, running firmware version 2.2.1
Serial Number: #####
** iPhone/iPod Touch Sync Tests
**
Sync tests completed successfully.
************************************************************
Just to see what it comes up with, I don't know if the diag. will fix any issues, since I've never needed to use it but it looks like it will give you a good report of whats going on. Go Apple! *and yes with the report feel free to block out any information you don't want to share.
2. I was reading around on the internet and I've found that a lot of the times its something simple to fix some of these issues like the one about the time getting messed up when windows xp goes to sleep. So Here is a simple idea to see if it helps.
Go to (edit)/(preferences) in the menu bar Click on the (Devices) tab and try clicking (Reset Sync History) button. Then try Syncing again. Don't know if it will help but hey worth a shot right?
3. My wife was looking around on the internet and she found a bunch of info on files that are corrupt not being able to sync, since I don't have a corrupt file and am at a lost in how to make one. I was unable to test this theory.
However, the information suggested that it may be related to a picture file. so I would look into the (photos) tab in the iPod touch's Summery page and un-check one picture folder at a time and sync to see if it is related to a particular image folder.
Also beside of the image folder it was noted that some errors are accruing with outlook syncing, so you might also look into the syncing of your contacts and emails in the (info) tab of the iPod Touch's Summery page.
After those too I would look into music that you have just stared to try and sync and try eliminated one at a time again to see if there is one particular file to be the error.
*In note of that it is suggested to only do one at a time, since its always best to do a process of elimination.
4. And last have you tried backing it up in iTunes and then Restoring it. To see if a hard reset like this fixes the issue?
Here is Apple's knowledge base article on it:
http://support.apple.com/kb/HT1414
*Sorry that its such a long post I just want to save you time waiting for me to get back to you.