Here is how you correct this problem.
It was nothing i found in iTunes but rather in windows itself.
Keep in mind this is for a Windows PC only so if you're on a MAC you might be SOL...
Navigate to where iTunes stores its files and then to where it stores its installed app folder called "Mobile Applications"
For me the path is:
C:\Users\(name)\Music\iTunes\iTunes Media\Mobile Applications
Within this folder you will see a list of Apps that iTunes will try to automatically install to your devices.
Go ahead and either move all of the app files from this location or just delete them.
(No harm will be done as your Apple account knows what you have downloaded and installed)
The only down side to this method is that you will have to re-download the apps if you ever want to re-install them.
After the apps are moved or deleted from this folder, go back to iTunes and then sync your device.
iTunes will no longer try to install unwanted apps because the folder where it stores them is empty.
Side note: The apps you have installed on your phone prior to syncing will be untouched (they will still be on your phone after the sync).
Retrieving data ...