Apple Mobile Device Service installation rolls back

Hey there,
I've been having problems installing iTunes 9 or even 8 on my computer. While running the iTunes setup, part of the installation rolls back and when I launch iTunes after that, I get the message saying that
"This iPod cannot be used because the required software is not installed. Run iTunes installer to remove iTunes, then install iTunes again."
However, the installation doesn't work no matter how many times i reinstall it. I've fully uninstalled everything related to apple and used the microsoft's utility to check if they were properly uninstalled before reinstalling itunes, but I still got the same message.
I found out that Apple Mobile Device Service was not installed and that was the problem. When i extracted AppleMobileDeviceService.msi from the iTunes installer and ran it, it rolled back too. So I used the /l*v command to create an installation log and this is the error.
DIFXAPP: INFO: opening HKEY_USERS 'S-1-5-21-4128058654-1677487342-2165978628-1007\Software\Microsoft\Windows\Curr entVersion\DIFxApp\Components\{9AA3828A-F852-11DB-8E29-6C6B55D89593}' (User's SID: 'S-1-5-21-4128058654-1677487342-2165978628-1007') ...
DIFXAPP: INFO: ENTER: DriverPackageInstallW
DIFXAPP: INFO: usbaapl.inf: checking signature with catalog 'C:\Program Files\Common Files\Apple\Mobile Device Support\Drivers\USBAAPL.CAT' ...
DIFXAPP: INFO: Driver package 'usbaapl.inf' is WHQL signed.
DIFXAPP: ERROR: Create Driver Store entry failed. (Error code 0x6E: The system cannot open the device or file specified.)
DIFXAPP: INFO: Successfully removed '{9AA3828A-F852-11DB-8E29-6C6B55D89593}' from reference list of driver store entry ''
DIFXAPP: INFO: RETURN: DriverPackageInstallW (0x52)
DIFXAPP: ERROR encountered while installing driver package C:\Program Files\Common Files\Apple\Mobile Device Support\Drivers\usbaapl.inf
DIFXAPP: InstallDriverPackages failed with error 0x52
DIFXAPP: RETURN: InstallDriverPackages() 82 (0x52)
Action ended 17:15:17: InstallFinalize. Return value 3.
Can anyone help me please? Any help will be appreciated =P
Cheers

I have recently been fighting my system to get itunes to recognise my iphone and i ran into a similar problem.
I couldnt uninstall the old version of apple mobile device support, and installing the new itunes over the top did not seem to help either.
But i found a work around.
Try opening the itunes.exe install package with winrar. (www.winrar.com, its a free program) and then extracting only the applemobiledevicesupport.exe file.
Reboot your system, run that file and then reboot again.
It should work.
If it doesnt, then good luck to you :P
-Adam

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    Thank you so much for this. This was the most helpful advice I could found and seems likely to be applicable to many other people. I had the problem of my iPhone suddenly not being recognized by iTunes and I couldn't figure out why. Although I didn't have exactly the same scenario as the OP, (no actual crash, just an error message from iTunes saying device could not be used because Apple Mobile Device Service was not started) I used the info above to localise the conflicting software (proxy software - doh!). After uninstalling that and rebooting everything is good again. Thanks once more.

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