"do not have sufficient permissions to sync"

Question

My son has an iPod touch. My other son had a classic iPod for a while and I tried to point both their iPods at a shared library. I think that failed epically, and may be the cause of our later problems.
Starting several months ago, #1 son couldn't sync his Touch. It got the famous "don't have permissions" error (this is on Windows Vista). I poked at it for a while and gave up, and he just continued downloading songs & apps directly through his iPod.
Now #2 son just got a Touch, and I decided I needed to get iTunes working on their computer. I backed up all their iTunes directories, then uninstalled iTunes and installed a fresh copy. So they should be starting with a completely fresh iTunes install, no iTunes folder carrying bad cruft, etc.
With the fresh iTunes install #1 son sees no songs or apps when he logs into iTunes -- not terribly surprising, I suppose -- but we can't figure out how to get them off his iPod. We can't even sync his iPod because of the permission problem. I've dug through dozens of posts and help articles without any success. I tried creating a new shortcut to iTunes and specifying it should be run as Administrator, but that didn't help either.
So:
* How can we fix this "no permission" problem!?!?
* How can we rescue the content on his iPod? He has quite purchased a few songs and apps directly through his Touch, and iTunes has never seen these. Though presumably his iTunes Store account knows he bought them. I tried to copy off the contents of the Touch by accessing it like a disk, but apparently that doesn't work for Touches. I tried checking the "manually manage music" checkbox and that didn't seem to help anything.
Help!?
Gary

Answer 1

No worries, thanks for the help!
New info: #2 son just got his new 3G Touch. It syncs with no problem.
So I tried syncing #1 son's Touch again. First we tried updating to 3.1.2, and the firmware was updated, but iTunes said the update failed because it (still) couldn't sync. Somewhere in there we got an error 3014, which is apparently one of a long list of generic connection-problem errors. Then iTunes said it detected an iPod in the midst of update, or something like that, and the only way to use it was to restore (wipe & reinitialize) the iPod. Oh GREAT.
So we did, since iTunes didn't give us any choice. After wiping the iPod, iTunes said it was restoring from a backup, giving us hope that it would restore all the content he had on there -- but it didn't. The restore-from-backup apparently did nothing. All his content (purchased and free) is gone. Grrrrrr.
So as long as we'd wiped it clean, I figured I would see if we could at least sync now. First it wanted to back up the iPod, which took well over an hour -- don't ask me why, since the thing is factory-fresh empty now, with nothing to back up. And at the end of that wasted hour of backup -- it STILL won't sync.
So out of desperation I tried running iTunes as an Administrator. (I had set the iTunes shortcut to Run As Administrator so theoretically he already WAS running as Admin, but...) --- and that worked FINE. @#%##. Should have tried that before we wiped the iPod...
So my son is still unable to sync his iPod -- from his login, anyway -- but it syncs just peachy from an Administrator login. Meanwhile another login with a different iTunes account has no problems syncing. This is clearly an iTunes bug. I've tried basically all the solutions I could find for these symptoms, and none of them worked for this particular variant. Hasn't anybody encountered this particular wrinkle before??
Thanks for any tips...
Gary