K it worked after I did the below:
System Details: Dell Laptop 2, USB ports at side and 2 at back. Windows XP SP2
I use a USB dongle for wireless network setup(thats a long story..)
I had to turn off the wifi, and remove the USB dongle.
Move the USB cable from iphone to the port on the back of laptop.
The itunes recognized my iphone.
Then connect my dongle to a USB port on the side and hook up to internet.
Not sure if the problem is with the Laptop USB port or if Itunes has an issue. Did the whole uninstall of itunes and reinstall before this. So i definitely have the latest Itunes.
Hope this helps some one struggling with the same issue.
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