The Craziness of iTunes 8 and iPhone

iTunes 8 loves to tell me I have an Application for download for my iPhone so I go to it and get ERROR 5002!
iTunes 8 also loves to takeover my Network ports so that I have no access to the internet until I FORCE QUIT it. This happens when attempting to access the store and Safari, Firefox, iDisk sync etc just hang. Force Quit releases the strangle hold most of the time. Otherwise I need to
Yesterday, iTunes 8 decided I had 13 updates and deleted 13 applications on my iPhone (1st gen) OS 2.1.
I had iTunes 8 do a factory restore of my iPhone assuming that would get rid of any unknown corruption. The restore worked fine and my missing apps were still missing however they're showing in /Users/USERNAME/Music/iTunes/Mobile Applications
I took suggestions and downloaded the missing apps from my iPhone and then synced with iTunes 8. The 13 applications update vanished on iTunes 8 however, I did notice that Apple made another change. When I first started downloading apps, the Mobile Applications folder would show the apps "Bloomberg.ipa"; then iTunes 7.7 would add the version when downloaded "Bloomberg 1.2.ipa"! iTunes 8 is back to "Bloomberg.ipa" Why Apple Why?
This morning I'm told by iTunes that I have 1 update. My iPhone says my apps are all up to date. I've got that "We could not complete your iTunes Store request, An unknown error occurred (5002). There was an error in the iTunes Store. Please try again later."
Model Name: Mac Pro
Model Identifier: MacPro3,1
Processor Name: Quad-Core Intel Xeon
Processor Speed: 2.8 GHz
Number Of Processors: 2
Total Number Of Cores: 8
L2 Cache (per processor): 12 MB
Memory: 14 GB
Bus Speed: 1.6 GHz
Boot ROM Version: MP31.006C.B05
SMC Version: 1.25f4
Any other suggestions or do I go back to iTunes 7.7 which worked great?
Finally, Apple, please seriously consider stop adding new features and FIX what you have?

I clicked on every application in iTunes and found one Application that was in Itunes but had been deleted. i deleted that application from iTunes and the error message went away.

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