I had this problem with iTunes previously, but solved the problem by reverting the program, so I am posting this here in case anyone who experienced the problem on a same setup can get a solution here.
After updating iTunes on my PC to the spanking new 9.0.2 64-bits to suit my current system platform, I kept getting numerous errors whenever I try to install new apps on my phone. The system will just fail an app install each time and will demand a phone restore each time I plug the phone back into the sync cable. Bad!
Also, what you will get from iTunes will be a myriad of irritating, yet not very helpful error messages only the person who wrote the program knows about. I mean who knows error codes man? So much for user friendly apple software!
“Cannot install… file not found”
Seemingly, the programs are not installed at all on the phone, but with the icons showing on the springboard. True enough, launching them will crash you back to the homescreen. iTunes will simply just hate your iPhone (Latest firmware 3.1.2) and treat it like some foreign virus, demanding it be cleansed with a restored backup each time after plugging your phone into your PC.
I’ve heard about file permission errors in the iTunes music directory. Sometimes, R-clicking on your iTunes music folder C:\Users\username\Music\iTunes and unchecking “Read only” under “Properties” will help.
In the end, it turned out that it’s an iTunes program error with the 64-bit version. Apparently, the latest iTunes 9.0.2 64-bit does not work on my setup running Windows 7 64-bit Ultimate. Force installing (the installer will recommend you to install the 64-bit version) the 9.0.2 iTunes 32-bit version makes everything work like a charm.