Win7 64bit here - I've just had this problem immediately after updating iTunes to 10.6.0.40 😟
After much flapping around and wasting about 5 hours of my day this is the fix that worked for me....
1. With iPhone plugged into USB - goto Control Panel - System - Device Manager - expand 'Mobile Devices' and uninstall the 'Apple iPhone'
2. Staying in the Device panel expand the USB Controllers - unstall the 'Apple Mobile Device USB Driver' and close the device manager window
3. Now unplug any Apple USB device.
4. Control Panel - Programs & Features - UNINSTALL "Apple Mobile Device Support"
5. Restart Computer
5. Open Windows Explorer and navigate to C:/Program Data/Apple/Installer Cache/
Now 'sort by date' in that directory, and open a folder that's an earlier/previous version ("Apple Mobile Device Support 4.0.0.97" worked great for me) and double click the installer that resides in that folder (AppleMobileDeviceSupport64.msi) and allow it to run.
6. Restart your computer
7. Plug in your iPhone and allow it to re-detect the device.
8. Open iTunes and hopefully you'll be back in business.
Best of British to you et'al with this SERIOUSLY abismal problem. APPLE PLEASE GET YOUR WIN7 PROGRAMMING **** TOGETHER. There are also problems with multiple USB drivers stacking up on the USB controllers (device manager - show unconnected devices) this causing the iPhone not to be seen when pluging in to any usb port. That's just shoddy installer/cleanup programming - NO EXCUSE.