Hi, have the exact same problem but decided to use the work-around of using the space bar to play/pause music. Only drawback is that the application needs to be in the 'foreground' to work.
I have had this problem to. But i updated itunes to 10.1.1 and now the problem is gone... No idea why... Just realized that now when i tried to press F7 aka play/pause-button.
Since I don't use iTunes very often (I only use it to update the library for the player that I use instead), I put my iTunes into a .dmg in my applications. That way I can still access iTunes when I want to, but the play/pause button doesn't automatically open it.
I have had this problem to. But i updated itunes to 10.1.1 and now the problem is gone... No idea why... Just realized that now when i tried to press F7 aka play/pause-button.