A few fixes that worked for me on the definite Dropout problem Apple won't acknowledge.
1) Load up Itunes 9 and watch everything work flawlessly. 10.2 is awful and has way too many bugs.
2) Change security settings from WPA/WPA2 to WEP. This fixes all issues with dropouts completely but can create some issue if you use apples and PC's on the same network regarding hashing of passwords for the WEP protocol.
3) Turn off security to your network.
Or wait for Apple to fix the issue which they won't, because to them there is no problem.
I don't know which is more annoying, the dropouts using WPA security, or the "join tracks" feature that no longer works in 10.2
The list goes on and on for iTunes 10.2 problems.