I get the same error message. I have iTunes 10.5, an iPhone 4 and an iPad 2. This started happening a couple of days after the iOS 5 upgrade. The error message alternates with one that reads,
iTunes could not connect to the iPhone ""because an invalid response was received from the device.
Both the iPhone and iPad were showing up in iTunes via wifi sync (neither was connected with USB at the time) when this started. I clicked on the iPhone link in iTunes and turned off wifi sync hoping it would fix the problem, but nothing changed.
The error messages pop up continuously any time I have iTunes running on my PC, which is a substantial aggravation since I use it as a music player in the background. Any solutions would be appreciated!