The folder iTunes is on a locked disk or you do not have write permissions for this folder.
I got this error after changing folder locations on my computer that iTunes was set to use.
To get around this problem go to your 'iTunes folder' and right click on 'iTunes.exe' and choose 'Properties' - choose to 'Run As Administrator' - this should fix your error.
This isn't a permanent fix and you need to go through this process every time you want to load iTunes. Today I am going to look for a more permanent fix.
I have since (I do not recommend doing this btw) removed itunes and every itunes related entry on my computer inculding folders and reg entries.
I reinstalled iTunes and then had a new problem which was "This iPod cannot be used because the required software is not installed" I am running windows 7 64bit version and had installed iTunes 64bit version.
I googled that and found this post http://randomwindowstips.wordpress.com/2009/12/08/windows-7-itunes-9-software-is-not-installed/ - I followed these instructions and now everything works as it should. Thanks to the owner of Random Windows Tips for creating that post.
