I've been having the same problem. It'll be paused on a given song, either because I paused it or because I put the computer to sleep, and when I hit space to start it playing again it acts like I hit 'stop' rather than 'play'. Then space, return, double-clicking, clicking the play button, selecting 'Controls -> Play', none work on that or any other songs, and I have to quit and reopen iTunes.
I recently got a new MacBook Pro with Tiger and iTunes 7 on it, and it's having these problems, which I never had on my PowerBook G4 with Tiger and iTunes 7. Perhaps it was a recent 'update'?