I am also getting the same message on my iPad, when connecting to a Win7 PC.
I have tried the solutions given at http://support.apple.com/kb/TS1567 but no solution.
I am desperate to get a backup of my iPad. The PC recognises the device but iTunes fails to do so and says -
"this iPad cannot be used because the Apple Mobile Device service is not started".
The normal status of the service shows 'Started' but when I plug in my iPad, it shows 'Stopped'.