Another case of bad quality control on the part of Apple...
Luckily I have several Macs, and tend to update only one at a time, an wait to see what they have messed up this time, they manage make quite a few headaches with EVERY update, despite what the appologists would have you believe.
Anyway, having compared two machines, (one updated the other not) the update of iTunes to 10.7 seems to have updated AppleUSBEthernetHost.kext to version 2.3.6 and in the process messed it up (of course, its not their fault).
You need to replace this kext with a good version or an earlier working version, repairing permissions did not work.
To do this, download KextUtility and install it, then drag the old working kext onto the KextUtility icon, it willreplace the broken version and fix any other permission issues in your S/L/E folder.
and the working kexts (if you can't find it on your time machine backup)...
Version 2.2.0 (Working on 10.6.8) http://db.tt/Fahk9VBe
Version 2.3.6 (Working on 10.8 & 10.7) http://db.tt/U674UcOV
Nice one Apple, thanks for wasting a few hours of my life, AGAIN.