'The installer has insufficient priviledges to access directory C:\PF\Ipod\bin. The install cannot continue. Log on as administrator or contact your system administrator.'.
That's consistent with disk/file damage, chester.
Let's first try running a chkdsk over your C drive. There's Windows 7 instructions in the following document. Select both "automatically fix file system errors" and "scan for and attempt recovery of bad sectors" or use chkdsk /r (depending on which way you choose to go about things). You should be prompted to schedule the scan to run on restart. That sort of scan of the C drive should take a long time ... if it quits after a few minutes or seconds, something's interfering with the scan:
http://www.w7forums.com/use-chkdsk-check-disk-t448.html (How to use CHKDSK (Check Disk))
Does the chkdsk find/repair any damage? If so, try another iTunes install. Does it go through properly this time?