Okay.
We're going to try something experimental. A bit of a performance, I'm afraid.
Quit iTunes if you have it open. Unplug any ipods/iPhones.
From the Start menu, click Open.
In the Organize menu, click Folder and Search Options.
Click the View tab.
In the "Advanced settings" pane under "Hidden files and folders" make sure that:
The "Show hidden files and folders" option is
selected
The "Hide extensions for known filetypes" box is
unchecked
The "Hide protected operating system files (Recommended)" box is
unchecked
Click OK.
Now, in "Computer", open Local Disk C: (or whichever drive your operating system is installed on).
Open the "Windows" folder.
Open the "system32" folder.
Right-click the "DRVSTORE" folder and select "Properties".
In the "General" tab, click the "Advanced" button.
If "Compress contents to save disk space" is checked, uncheck it and click OK.
Click OK again in the "general" tab.
Open the "DRVSTORE" folder.
In amongst the folders in there, do you see a folder called "usbaapl_<long-string-of-numbers>"? If so, drag it out onto the desktop.
In amongst the folders in there, do you see a folder called "netaapl_<long-string-of-numbers>"? If so, drag it out onto the desktop.
Go back into the "system32" folder.
Open the "Drivers" folder.
Do you see a "usbaapl.sys" file in there? If so drag it out onto the desktop.
Do you see a "netaapl.sys" file in there? If so drag it out onto the desktop.
Close the folders. Restart the PC. Do not open any applications after the restart.
After the restart, go into your "Uninstall a program" control panel. Select "Apple Mobile Device Support". Click "Repair".
If the repair install seems to go through properly, restart the PC, and try plugging in the iPhone again.
... any recognition for the iPod Touch this time around?