Iphone 3g not recognized by itunes but recognized by pc as camera? HELP!

I have been through the help pages, checked that i have the most upto date itunes.
I went through the Verify iPhone Driver/Service Installation page. When i open the DEVICES page i scroll down to the USB lists and there is no iphone or apple mobile device listed. I look under Imaging devices and there it is Apple mobile device.
I have tried rebooting my pc rebooting the iphone tried differnt usb ports and unplugging every other usb device. Yet when i plug in my iphone in the bottom right hand screen corner a bubble appears which says "digital still camera". Then asks me which program i'd like to open to view my pictures! If i leave it attached it charges the iphone but does nothing else.
My husband can connect his iphone not 3g to the computer and it syncs no problems.
Does anyone have any suggestions?

Attach your iPhone to your PC.
Open up My Computer and locate the iPhone on the list of drives. It might call it a camera or imaging device.
Right-click on the iPhone in the drive list and select "Properties."
On the "Events" tab, select "Take No Action." Make sure that nothing else on that tab is selected.
Click on "OK."
That should stop it from asking what program you want to edit your pictures with.

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