I connected to iTunes 10.5 with my iphone 4 updated to iOS 5 and iTunes appears to be stuck in Syncing step 2 of 4 Backing up. Is this supposed to take a long time? So far about 25 minutes.
Did you try this? Found this in several places and it works for me
1. Quit iTunes.
2. Start an elevated command prompt (Start Menu -> All Programs -> Accessories -> Right Click "Command Prompt" -> "Run as Administrator")
3. Once in the command prompt, type "netsh winsock reset" and hit ENTER.
4. Reboot your machine.
5. Restart iTunes.