iTunes 10: iPhone, iPod or iPad Won’t Sync AppleToolbox – Tools, Tips and Fixes for iPhone, Mac, iPad and iPod.  Some good steps here.  I would start in this order though:

1. Delete iTunes .plist
2. Remove third-party backup of antivirus software.
3. Reinstall iTunes
4. Disable network connection
5. Switch USB ports
6. Restore instead of update.

Robert Pearson suggests this to keep the playlists and music intact.

I played around and found a fix,
Quit iTunes
go to: Users/your home folder(whatever you call it)/Music/iTunes/(here you will see a folder called”Previous iTunes Library”, click on this folder, rename this file “iTunes Library”(remove the “iTunes Library” file from the iTunes folder (usually the file directly below the “Previous iTunes Library” folder/ drag the renamed file to replace this one, restart itunes and Playlists and music should be restored perfectly,
worked for me, now if only the “experts” can work this out ( to share with everyone with this problem) or why this fix is even needed there will a lot of happy customers, good luck