This solved the issues I was having (stated above), and should help everyone having AirDisk issues (performance / iTunes etc). I got this post from the Apple Support forums.
"Okay well I fixed mine. After searching since Fri for a solution I finally found the issue. Before I proceed, let me first say that you shouldn't attempt this fix unless you know what you are doing. I'm not an Apple Engineer and don't know how this will effect your computer. I did it to mine and it worked... That said...
From what I can tell the Airport Base Station Agent (that lives in Core Services) that ships with Leopard appears to be broken. (At least I think it shipped with Leopard or maybe it was on the AEBS install disk 2.0, I'm not sure anymore... My mind is kinda mush now...) But at any rate I figured out that the version of the Airport Disk Utility that I had regardless of where it came from was not the newest version. I had 1.2 and the newest was 1.2.1. I downloaded the Airport 2007-002 update (AirPortUtility521.dmg) from Apple Support and tried to install it. It failed because it said I already had the latest software. I assume this is because Leopard shipped with Airport Utility 5.2.2 and that update had 5.2.1. So I got creative and did a show contents on the package and extracted the archive that was in there. I found there were 4 files in there.
Applications/Utilities/AirPort Disk Utility (Ver 1.2.1)
Applications/Utilities/Airport Utility (Ver 5.2.1)
System/Library/Contextual Menu Items/AirPort Disk Menu.plugin (Ver 1.2.1)
System/Library/CoreServices/AirPort Base Station Agent (Ver 1.2.1)
So basically I removed the AirPort Base Station Agent from my login items, restarted, and then copied all these files (Except for the Airport Utility, I kept the 5.2.2 that shipped with Leopard) into their respective directories (Which is basically the same as the folder paths in the archive.), added AirPort Base Station Agent back to my startup items, and then did one more restart. Upon login life was good and now AirPort Disk Utility properly launches, puts the icon on the menu bar next to the time and maps my shared and private drive. The reason you have to remove the Agent and restart is because you can't copy over the file if its open. You will need to play with the permissions on the other files to get them to copy. Hopefully one of the Apple Engineers will read this and figure out exactly what is missing. (Note the Agent 1.2.1 is about 800k where 1.2.2 was about 300k... seems like something is missing...)
On another note (as long as the Apple Engineers are reading..) in Leopard when you click on "Shared" in the sidebar from Finder, it lists the AEBS. When you click it, it only shows the "Shared" volume from the attached drive and not the private drive for the logged in user. Those who are used to using the account mode will find this very annoying and should be fixed. "