My problem was that I had another user logged in to the computer using iTunes. When that user closed iTunes the update worked fine. Might be that you are having a program running that is using iTunes.
Otherwise you can try downloading the latest iTunes from http://www.apple.com/itunes/download/.
After reading you reply, I manually checked each user of this computer, three of us in total, and for some reason itunes was open in one users section. Once I closed itunes the update went thru.
I learned a lesson that admin closing for all users failed me in this instance, and I erred in not manually checking each user.
And you have earned my thanks, and 10 points!!