http://www.iphonefans.com/troubleshooting-support/690-itunes-wont-recognize-ipho ne.html
[quote]I have the solution...TRUST ME. I have done all of the restore, reinstall, update drivers...etc...here is the SOLUTION. It seems that when you plug your iPhone in for the first time, your PC automatically installs the iPhone as a "Camera device". This is the problem. All you need to do is point it to the correct driver, which is a USB driver in device manager. Follow these steps, I will bet that it solves all of your recognition issues.
1. 1. First off you need to have iTunes installed and the ipod touch plugged in
and recognized as ‘something’ e.g. digital camera (it shouldn’t really
matter what it’s recognized as, but it needs to be found by windows).
2. Search for usbaapl in the C:\WINDOWS system folder:
o open windows explorer (e.g. Right-click Start and then click ‘explore’)
o right-click the WINDOWS folder and select ‘Search’).
o type in usbaapl and hit Search – try to ignore the dog!
You should find the driver info in a sub folder of
C:\WINDOWS\system32\DRVSTORE e.g. C:\WINDOWS\system32\DRVSTORE\usbaapl_A65621D65F5B7 507DD7B22331826547BDD2D206B
Remember that location (either leave the search box open or copy the folder
name into note pad – you’ll need it later)
If you don’t find usbaapl.sys, usbaapl.inf etc. then your drivers have not
been installed with the iTunes install and you’ll have to reinstall iTunes.
3. Locate the ipod-camera device:
o Open the device manager, e.g. using Start > Control Panel >
Performance and Maintenance > System > Hardware Tab > Device Manager
o Look for a device called ‘ipod’ - if your ipod shows up as
‘digital camera’ it will be under something like ‘imaging devices’.
4. Update the driver:
o Right click the ‘ipod-camera’ in device manager and click on
‘Update Driver’ – the Hardware Update Wizard will open.
o Check the ‘Install from a list or specific location’ then click ‘Next’
o Check ‘Dont search. I will choose the driver to install' click 'Next'
Here you should see the Apple Device to update, click "Have Disk"
In the text box below type (or better copy and paste) or browse the folder
containing the ipod driver information found in step 1 (in the example
above it was C:\WINDOWS\system32\DRVSTORE\usbaapl_A65621D65F5B7 507DD7B22331826547BDD2D206B),
Click "OK"
DONE!! the driver is now updated and located in the correct USB port [/quote]