ITunes puts my computer in windows 7 basic color mode. It also does not recognize my iPad as viable video source

When I start iTunes on my desktop computer, instantly it switches to Windows 7 Basic Color mode:
"The color scheme has been changed
The following program has performed an action that requires Windows to temporarily change the color scheme to Windows 7 Basic.
Program: iTunes
Publisher: Apple Inc.
Process indentifier (PID): 3296
Windows will automatically change the color scheme back to Windows Aero when this program or other programs performing similar actions are no longer running."
When I close iTunes, it immediately switches back.
THEN, when I try and move a movie I have recently downloaded ("Tangled (2010)" or "Tron: Legacy") to my iPad (1st edition) or iPod Touch, iTunes tells me these devices are not supported:
"Tangled (2010) was not copied to the iPad "My iPad" because it cannot be played on this iPad."
I get the same message with "Tron". This is only happening with the movies I have downloaded after February. All previously downloaded movies work just fine. I have found when I transfer the new files to my laptop and use iTunes on there, everything works normally. 
New for today...
When I plug the iPod Touch into the the desktop computer, iTunes locks up completely. I only get it back when I unplug the iPod.
Solutions...
I have done minimal talking via email with iTunes support. They told me to make sure I had the updated version of everything. I had explained in my original inquiry I had done that already. When I replied as such, I did not get a reply. I sent several messages explaining that I have deleted itunes all together from my computer and reinstalled the program from scratch. Finally, I received a second reply to reinstall iTunes.
Also, I have tried several ways of moving the movies over to the iPad and iPod: dragging/dropping, sync, auto sync. I get the same error message every time.
I am more than a little frustrated with Apple's lack of support and hope someone out there knows something that can be done. PLEASE HELP!
My desktop computer:
Homebuilt with EVGA 58x motherboard
Processor: Intel i7 920 @ 2.67GHZ
RAM: 12 GB
System Type: 64-bit Operating System
OS: Windows 7 Ultimate w/Service Pack 1
nVidia GeForce GTX 275 1GB GDDR3
DirectX 11.0
My laptop:
HP Pavilion dv6700
Processor: Intel Core Duo T8100 @ 2.10GHZ
RAM: 3 GB
System Type: 32-bit Operating System
OS: Windows 7 Ultimate
nVidia GeForce 8400M GS
Thanks in advance,
Scott

Just curious, have you resolved your issue yet?
I am working on a friend's computer that had the same issue and it turned out that her iTunes was set by some crappy program called TuneUp Companion to use Windos XP compatibility.
If you have TuneUp Companion, uninstall it.
Then check to see if iTunes is trying to run in some prior windows version compatibility and turn it off
http://support.apple.com/kb/TS1489

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