Hi,
When it started to save (before it says insufficient priv, error 1321, etc...) it attempted to save over my old iTunes folder. At that point, I hi-lighted the folder name and just changed the name to iTunes_2, and Vista created a new folder automatically. So, you have to sit there and watch which folder it tries to install to, but it's worth it if you can redirect the installation to a new folder that you create on the spot! After that, I didn't have any problems, and everything new is in my iTunes_2 folder. I didn't delete the old folder, just incase.
Really frustrating, though! Is this a technique to get us all to switch to Mac????!!!!