Hi,
I have had this problem on and off for 3 years. I've searched before and drawn a blank. I've persisted and eventually it's worked after dozens of attempts / restarts / End Tasking on the PC. I've even been into the local APPLE store to ask for help but honestly, they tell me in all seriousness, they know nothing about PCs. That's the first issue it seems. I now need to update the iOS on an iPhone 3GS and before that I sensibly need to SYNC it first. I have specifically searched for 'iTunes freezes whilst syncing iPhone', it looked like there were only 2 pages of similar posts. But wait, click on next page, and again, again... at 15 per page I got to page 16 and these are sorted by relevance, but the titles still amount to the same problem, I gave up but would love to know just how many posts there are on this topic alone. Many go back several years to before when I first got an iPhone.
As an IT engineer, I get the impression that iTunes either works for you and works well, or... it will freeze up and when Windows Task Manager is consulted, it will show that the numerous constiuent Apple / iTunes processes that it fires up, consume ALL available processing power. This makes your PC slow and can only be fixed by a reboot, often a 'hold the power button for 4 seconds' emergency shutdown because it won't restart / reboot normally anymore. Even just connecting your iPhone can start these processes. Try rebooting and running without ever connecting an iPhone, the speed difference is staggering.
I also think it is make / model specific. Perhaps some PC manufacturers drivers / utilities are in conflict here, I'm using a Toshiba laptop and all others like behave the same.
I've heard that if you find someone with a MAC and connect to their system your iPhone will all get synced and updated in a trice. Surely there are far more PCs than MACs in the world by an order of magnitude or more ? Would it not be good business sense to serve that community in the interests of Apple shareholders if nothing else ?
So as you can see, Apple are busy placing their tremendous resources to resolve the problem for us PC users. I have even heard that the issue will be fixed by the release of a future iPhone.