I bought an iPhone 3G recently and for some reason my previously installed iTunes (on Windows XP) couldn’t recognize that the iPhone was plugged in! I had iTunes already installed, because I already have an iPod. I spent a couple hours trying to fix the issue, installing the latest version of iTunes didn’t help. Finally, these steps did it for me, and I was able to see iPhone in iTunes in the left hand side under “My devices”.
1) Uninstalled iTunes, Apple Mobile Devices, Apple Installer, Quicktime and Bonjour. (Make sure that ALL apple related software is cleaned up!!!)
2) Deleted iTunes folder from User <your login account> Music. (I skipped this step initially, and re-installation didn’t do anything for me)
3) Made sure iTunes directory deleted from Program Files.
4) Searched for and deleted all .itl files (iTunes Library Files).
5) Rebooted PC
6) Installed the latest version of iTunes 8 (available on Apple’s website).