The newest iTunes won't work unless iTunes and supporting applications are completely uninstalled first.
After you have uninstalled everything Apple tells you to (http://support.apple.com/kb/HT1923) using the uninstall feature in the Control Panel, these are the folders you need to manually delete the contents of:
C:\Program Files\Common Files\Apple\Mobile Device Support
C:\Program Files (x86)\Common Files\Apple\Mobile Device Support (if it exists)
You have to delete the contents of the Mobile Device Support folders before you can delete the Mobile Device Support folders or you will get an error message.
If you don't have the Mobile Device Support folder in either location, reboot and try to install the software. This has worked for lots of people so far. I hope it works for you, too.