How do I reset my iTunes Library? It's hosed. Transfer Purchases hosed.

I try to do the Transfer Purchase option. It's literally doing NOTHING. I simply need to RESET my iTunes library. I have no music to lose. ALL APPS are on my iPhone. I need to treat this as if I am attempting to backup my phone for the first time. Backup does work. But Transfer Purchases doesn't do anything and I KNOW it suppose to copy the app files into this location:
Users/[name_here]/Music/iTunes/iTunes Media/Mobile Applications

BUT this is EMPTY. Transfer Purchases simply does not work. I've got around 600 apps I need backed up. There's gotta be a simple solution for resetting a friggin iTunes library.

Message was edited by: thespaciousmind

I get a message "Tranfering purchases from xxx's iPhone" for about 3 seconds. The syncing message appears on my iPhone for about 3 seconds. Then it stops. Nothing happens.

I'm hung up on the file location because that is where the files are SUPPOSE to get copied to after you run Transfer Purchases.

In iTunes, under Library/Apps, I see a bunch of icons for SOME games I've removed a LONG time ago, I see icons for other games I still have on my device and I see a bunch if "A" icons (no image).

On EVERY image, when I click on it, I get an exclamation mark "!".
I right click -> get info and I get a dialog box with message saying "the app xxx could not be used because the original file cannot be found"

It's SCREWED. Trust me.

So instead of repeating every little symptom, can ANYONE simply tell me how to RESET an iTunes library. It just needs to be ZAPPED. Period. So when I connect my iPhone, iTunes will create the library completely over again and allow me (hopefully) to backup my phone and transfer purchases from my phone.

+Users/davekees/Music/iTunes/iTunes Media/Mobile Applications+

YES! Do you know how to reset the iTunes library? If not, go away.

Message was edited by: thespaciousmind

If I reinstall, what will happen to my wife's iTunes library and her content?

Here's the solution folks:

Under "Library -> Apps" I just selected ALL APP ICONS and DELETED them.
Then I connected my device, then selected "Transfer Purchases". Now it works.

NOTE to Apple Support, put this in your records: if FILE TRANSFER QUITS WORKING for anyone, there's no need to go through the 20+ steps to remove iTunes and then reinstall it (I can't believe there's no UNINSTALLER for this lame tool).

Message was edited by: thespaciousmind