iTunes 8.1.x and Vista
It appears that upgrading to Windows 7 and iTunes 9 resolves this entire issue with Vista and iTunes. Please see my latest Randosity article for specifics.
Just a quick update on the iTunes and Vista problems. If you are experiencing troubles using iTunes on Vista, please see my updated Randosity article on how to fix iTunes installation issues. The fix has been simplified and works easily to resolve the registry issues surrounding iTunes.