...and yet another user with the same problems, tried the same fixes up to and including repairing Windows 7 installation, completely removing my graphics adapter then after booting back into Win 7 with the basic on-board graphics adapter, I reinstalled my Radeon HD 6850 graphics adapter with the newest driver & software update (2 days after the most recent, non-beta, driver & ATI's Catalyst Control Center update) which has left me in the EXACT same situation....immediate iTunes application hang when attempting to play ANY video. QuickTime will play the videos every time with 0 issues.
One thing that I have noticed is that it appears that most everyone I have seen who is posting with this major issue of one of iTunes core features, which has been a part of iTunes either from the start or close to it I will add, have a few common items in our system configurations. Nearly everyone whom I have seen post their system specs & are having the exact same issues, have Windows 7 64bit or an earlier 64bit version of Windows running multi-core Intel i series CPU's. I have not paid attention to how many others are running ATI/AMD Radeon Graphics Adapters too but I'd wager that it is probably greater than 75% of the users with this issue.
Could there be some correlation here that perhaps in the major changes to iTunes 10, which were further developed & expanded upon in the subsequent iTunes 11 series, one or more of the changes may have incompatibility issues with one or more of these components which most of us users getting this same error have in common? Although given the fact that it doesn't seem to be a vast majority of users having this issue, it seems it may be a more likely issue between the newer versions of iTunes & system configurations with a specific combination of these components.
Whatever the case may be....Apple should be spending time to resolve this issue instead of releasing more and more updates which correct other issues, often with far less of an impact to their customers, or adding new features when major issues with such a core function remains unresolved.