If you are having the issue of the iPhone only popping up as a digital camera when connected to your computer, but not showing in iTunes, I was having the same problem until a short while ago, and I just got the issue resolved. I've done my best to document the steps I took to remedy it, so have a go at it.
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I'm using Windows XP Pro-
First, ensure that you have iTUnes 7.5 Installed. I recommend this version, since 7.6.1 is what caused this problem for me in the first place.
If you need to uninstall a newer version, do so by opening the control panel and use the "Add/Remove Programs" utility.
1- You must right-click on "My Computer" and select "Manage
2- In the left pane, select "Device Manager"
3- In the right window, expand "Imaging devices" or similar imaging category
4- You should see "Apple Camera" or something similar
5- Right click on the "Apple camera" and select "Update Driver"
6- Select second option "Install from a list or specific location (Advanced)" click Next
7- Check the box labeled "Include this location in the search
8- Copy and paste this path into the folder line- C:\Program Files\Common Files\Apple\Mobile Device Support\Drivers
9- Click "Next"
Windows should now locate the necessary USBAAPL driver to run the iPhone and enable it's detection in iTunes.
If this does not work, open your windows explorer, and use the search option at the top of the window. Search for "Usbaapl". This should turn up the location of the driver files you need to reassociate the iPhone with iTunes. Make a note of the directory, and use that in the Driver Update (step 8 above). My drivers happened to be in the C:\Program Files\Common Files\Apple\Mobile Device Support\Drivers folder.
I hope this gets some of you back to working /syncing order.
WOW thanks! Search for answer and was very stressed up until I tried your method! You are a Genius!