For those running 10.8 and getting this error when downloading Apps here is what to do.
I was alas forced as my previous MBP died of BSD to buy a new one and that came with 10.8. In any case to remedy this error, simply find a machine that is running 10.6 and all will be well. Dont' know what the issue is with iTunes and 10.8, but there you go. My other machine will remain frozen at 10.6.8 until it dies.
Pro, OS X Mountain Lion (10.8.4), 10GB RAM