Recently we found this combination:
iTunes 9.2.1 for WIndows XP SP2 but maybe 3, running via Parallels 3.x did not have drivers or otherwise support the iPhone 4.
iTunes just wouldn’t see the iPhone.
We upgraded to Parallels 5, and it was all fine.
The moral of the story might be that upgrading any one component in your setup can force you to upgrade many other components to ensure compatibility, even if the rest of it was running smoothly and to your satisfaction.