So I've read quite a bit about this issue, but attempts to re-install iTunes and the AMDS have not helped.

Edit: I left out some pretty important information, sorry.
I'm running iTunes v8.2 from Apple's website. Previously, I was running the beta version from the dev-site. Things worked fine until I installed the public release version.

Here is the contents of the Windows Event Log:

Faulting application name: AppleMobileDeviceService.exe, version: 2.50.37.0, time stamp: 0x49ed694d
Faulting module name: AppleMobileDeviceService.exe, version: 2.50.37.0, time stamp: 0x49ed694d
Exception code: 0xc0000005
Fault offset: 0x0000e913
Faulting process id: 0x61c
Faulting application start time: 0x01c9d37e74bf9e91
Faulting application path: C:\Program Files\Common Files\Apple\Mobile Device Support\bin\AppleMobileDeviceService.exe
Faulting module path: C:\Program Files\Common Files\Apple\Mobile Device Support\bin\AppleMobileDeviceService.exe
Report Id: 7bfbaff7-3f89-11de-bea5-001b38d45d59

Is anyone else having this issue? Does anyone have any suggestions?

About my iPhone:
Model: 16GB 3G
Firmware: Legit Beta 5
Operating System: Windows 7 32-bit RC1

Let me know if you need any further info, and thank you in advance =)

Try rebooting your iPhone when it is still plugged in to your computer (and iTunes is open).

Same problem here with the GM.

Rebooting didn't fix it …

Same thing happened to me first time.
Not sure what it was but got it workin the 2nd time.

I had installed iTunes 8.2 Pre-release but after installing i didn't update the computer. After I updated I got stuck at the activation screen with iTunes telling me there was an invalid device connected.

I rebooted my PC then went into DFU mode on the phone and reinstalled GM.
This time had no issues with it activating and restoring from backup.

Try to uninstall iTunes and all its components on your PC. I have the same problem on my Mac and ended up having to manually clean up some files.

raining ktula Blog Archive How to fix “iTunes could not back up the iPhone” error

ok, here's what did the trick for me:

1. In the Finder, locate iTunes in the Applications folder and drag it to the Trash.

2. Choose Go > Go to Folder. Enter /System/Library/Extensions and click Go.

3. Locate the file AppleMobileDevice.kext and drag it to the Trash.

4. Choose Go > Go to Folder. Enter /Library/Receipts/ and click Go.

5. Locate the file AppleMobileDeviceSupport.pkg and drag it to the Trash. If prompted, authenticate with the admin password.

6. Choose Finder > Empty Trash and restart the computer.

7. Download and install the current version of iTunes: Apple - Download music and more with iTunes. Play it all on iPod.

reinstall the latest version of itunes and restore your iPhone.

Mac OSX 10.6.3
iTunes 10.4.1 (11)
iPhone 3GS v 4.1 (8B117)

I can't remember where I found it in Apple's help but the heading for the page is:

Mac OS X v10.6: iOS device not recognized in iTunes after restart

Anyway, the first solution advised
-------------
In Finder, click the Go menu and then choose Go to Folder. Enter the following location into the text field that
appears:
/System/Library/LaunchDaemons
4. Click Go.
5. Locate the file "com.apple.usbmuxd.plist~orig" and drag it to the Trash. (Do not move the similarly named"com.apple.usbmuxd.plist" file to the Trash.)
-------------
I didn't put it into the trash: I first moved it (actually, I think the OS just copied it) to the desktop (I wanted a copy in case I needed to re-install it into that folder), THEN I put the file which was still in that LaunchDaemons folder into the trash and deleted it .

I re-started my Mac, connected my iPhone, launched iTunes . . . voila! All good !