How to fix the "Unable to install Apple Mobile Device USB Driver" problem
If you have upgraded your iTunes to version 9.2 you may have run into the problem that your computer no longer recognizes your iPhone/iPad/iPod. I had the problem on one computer, but not the other. When you connect the device it starts installing the driver, then it fails and iTunes never sees your device.
After a fruitless 45 minutes on the phone with and Apple support technician that seemed to be new to Windows and who eventually hung up on me, and a web search that turned up nothing I decided to take things in my own hands. Here is how you fix this problem if you have it.
First, open Computer Management. You can do this by clicking the little Window logo that is your Start menu, right click "Computer", and click "Manage."
Click the Device Manager node. At the bottom you see Universal Serial Bus Controllers. It may be expanded already, otherwise expand it.
Now connect your device. It will start loading the driver, the Device Manager window will go blank once or twice, and eventually you will see the Apple Mobile Device USB Driver. It will have a yellow exclamation mark super-imposed on it. That signifies it failed to load. If it doesn't show up, disconnect the device and try it again. I had to try a couple of times before it stuck long enough to do anything with it.
Right click Apple Mobile Device USB Driver and select Properties. Click the Driver tab, and then click the Uninstall button. You will get a dialog that asks you whether you want to also delete the driver. You do. The driver is faulty and you want to get rid of it. It appears the iTunes 9.2 installer actually destroys the configuration of that driver. I have not investigated how exactly it does this but I would expect that the registry configuration is flawed. Perhaps someone can post the flawed and correct ones and we can come up with an easier way to fix this problem?
Once you have deleted it close Computer Management and open the Programs and Features Control Panel applet. You now want to uninstall just about everything made by Apple. I found it easier to sort on publisher here so I can see everything. You want to get rid of Bonjour, Quicktime, Apple Software Update, Apple Application Support, Apple Mobile Device Support, and iTunes itself. Theoretically I suppose there ought to be some subset of this that you can remove, but the Apple support technician who was unable to solve the problem was adamant that Apple has failed to provide any way to install just the Apple Mobile Device Support component, which is all you actually need.
At this point you have an Apple free computer. You may actually want to seriously consider leaving it in this state and go find a mobile device from a manufacturer who does not consider the operating system they are programming for to be the enemy. However, if you want to actually keep your Apple device, go ahead and reinstall iTunes. Unlike the uninstall process, a single installer lays everything down for you. You won't need to restart afterward unless you have Outlook open while installing. Once you are done reinstalling, plug your device back in and the driver should now load properly.
It's worth noting that during the iTunes installation you will be presented with two User Account Control (UAC) prompts. This is because Apple deliberately designed its installer to do so. Obviously, making Windows seem more annoying than Mac OS has been a corporate goal of Apple's for some time now and this is just one small part in this. Technically the reason this happens is because the installer installs both iTunes and QuickTime and rather than elevate the entire installer with a single UAC prompt and then launch both component installers from there, they elevate each of the component installers with its own prompt. Considering it takes considerably less code to do this with a single installer one can only assume that this was a deliberate decision made to annoy Windows users.