ITunes reports "Apple Mobile Device" service error

Question

After much posting and messing around to find a solution to my service crash issues, I have some advice for others to share.
PROBLEM: If you launch "iTunes" and receive a message indicating that: This i<device> cannot be used because the Apple Mobile Device service is not started. The iPod/iPhone will not appear, nor will the system allow you to interact with the device.
CAUSE: There is usually another software installation that is "hooking" into the system and causing issues. These are usually in the form of proxy, firewall, anti-virus, and/or remote control programs.
SOLUTION: Use the "Computer Management" MMC (right-click "My Computer" and select "Manage") to track down the issue. Please do the following:
1) Check the "Services" section. You should see an entry called "Apple Mobile Device". This should be started with a startup value of "Automatic". If the status is "Stopped" (or at least indicates that it is not "Started"), then attempt to start the service. if nothing else, this will tell you if the required binary/executable is located in the correct directory for the service entry. If the service cannot start, or if the service reports that the file is missing, attempt to re-install the "Apple Mobile Device" MSI. Worse case, you may need to uninstall iTunes and re-install.
2) Try crashing the service again. The usual symptoms of this issue are that the service can be started, and will operate fine until iTunes is loaded, at which point the error message appears regarding the service (not being started). If you check the "services" section at this time, you will likely see that the previously running service is now stopped. Doing this will also create a new set of crash events in teh event log. Take note of the time when you "crash" the service and continue to the next step.
3) Check the "Event Viewer" section. locate the time of the service crash. The entries should be listed with a red "X" icon. now look at the event. This should tell you what the "Faulting module name" is. If you are using a proxy application or firewall, you may see something like "FPServiceProvider.dll" (Foxyproxy), "MPFP.dll" (McAfee Firewall), or even a generic entry like "ntdll.dll" (The Windows user environment). In every case (except "ntdll.dll") you swhould be able to search the web for the "DLL" or "EXE" name and work out what application is causing the issue. in the case of "ntdll.dll", you'll need to look for software that hooks into your system. Software like "DyKnow" remote control and other remote administration tools.
If you have installed a remote administration, remote control and/or security suite between a working iTunes and one that crashes, you may want to start with removing those as a test. Once I removed our faulty application (and it's hooks into the OS), iTunes funcationality was fully restored.
This is a "for your information" post. Hopefully it will save the trouble I had to go through to fix this problem.

Answer 1

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.