I'm using 10.7 also and getting the same thing even though I stay signed in and automatic downloads is already enabled and music, videos and books stays checked. But if I launch it within seconds the box won't come up. Have wait about 15 to 20 minutes before it does it again. I'm already signed in before I launch it and it prompts me to sign in to check for available downloads but since there isn't any it doesn't download anything. My username is pre-filled and I have put my password in and click the sign in button.
After that the box persists for a second time and stays there and I have to put in my password a second time click continue and the box just disappears. But I already have automatic downloads enabled and when I go under preferences> store the 3 boxes are checked. It says in that article that it dates back to iTunes 10.3.3 so I don't think that 10.7 should be affected. Crazy ey?
Did you just start using the auto-download feature like I did and I found out what your and my problem is. Do you keep resetting Safari? I replicated the problem and the problem is from reading the boards that when that box comes up iTunes is trying to recreate a cookie so that is can remember that it's signed in for automatic downloads.
When you keep resetting Safari your removing a cookie that iTunes keeps to remember that your logged in. It's not shutting off the auto-downloads its probably because you keep resetting Safari like me. I've even replicated the problem.
Try launching iTunes again without resetting Safari then go ahead and reset Safari and you'll notice that the box will come up again. The solution, if you wan't to stay logged into iTunes and use auto downloads so that when you purchase a song or movie on one device for it to transfer to your other devices you have to stay signed into iTunes.
The reason I never noticed this box come up is because I've always signed out of iTunes and i just starting using the iCloud and automatic download feature and since I no longer sign out of iTunes resetting Safari affects a cookie that iTunes keeps when it stays signed in therefore you and me are creating the problem ourselves. These guys were right! I know this from reading the boards and I've just tried to recreate the problem myself and that's what's doing it. So go ahead and do what I did and you'll see.
Launch iTunes while signed in an using automatic downloads (recheck the 3 boxes for music, apps & books) and you won't see this box. Once you reset Safari it will affect the iTunes cookie so that it won't remember your signed in (even though your are) that your sign in and the box will pop up right after resetting Safari. Like I said the reason I never noticed this is because I just started using the automatic download feature myself and always signed out so I never saw the box and to use that feature you have to stay signed in to iTunes store. By resetting Safari you also turning off iTunes. So go ahead and feel free to recheck those boxes again and stay signed into iTunes store.
If you use the private browsing feature to ask sites not to track you I don't know if this will affect iTunes or not because I haven't tried to recreate that problem yet but I'm going to test it. Hope this makes your feel better!
Just don't reset Safari! when your signed into iTunes and have automatic download boxes checked. If your signed out of iTunes all the time you would have never noticed this box like I didn't until I just started using the feature staying signed in. You have to stay signed into the iTunes store both on your iOS device and your computer for it to transfer from device to device.
iTunes: Unable to view account in iTunes
When you use Store > View My Account in iTunes for OS X, you may be asked to sign in repeatedly if you've blocked cookies in Safari.
To resolve this issue, from the Safari menu, choose Preferences > Privacy. Then, choose an option other than Always for blocking cookies.
Note: The default option for Safari is to block cookies "From third parties and advertisers" and is recommended for most usage.
If you want to block cookies temporarily when visiting websites, choose Safari > Private Browsing. Learn more about Private Browsing.
If you reset Safari, or remove cookies that iTunes uses from Safari preferences, iTunes may ask for your Apple ID when you open it next.
I don't reset Safari, so I wouldn't be removing any necessary cookies that way. I do use CCleaner, though, which allows me to manage cookies. I've never noticed any iTunes-related entries in the cookies list, but I suppose it's possible that it simply doesn't show it. Either way, though, I haven't deleted any cookies since this started, so I don't think it can be CCleaner.
The only other possibility is Privoxy, which I use as a proxy server for all my Macs. Whilst its default set-up blocks cookies, I've personally disabled that function. However, it's possible there's an aspect of Privoxy that's still affecting cookie creation. I'll look into this and see what I can come up with.
Thanks for the responses.