If our computer feels sluggish the two things you should be looking at are the CPU usage and any disk activity. I don't think RAM is a problem here. If it was you will notice much more page outs.
CPU usage because some runaway process is eating up all your CPU power.
Disk usage because sometimes an app might be doing something intensive or you might be paging out excessively (which isn't the case in your situation).
What exactly is iTunes doing in that screenshot? (EDIT: converting vid, gotcha. skim reading strikes again!) Any process that takes up a whole single core and doesn't use much disk seek time doesn't slow down the system at all (thats the beauty of mutli-core computing). You can convert video in Handbrake and play WoW at the same time (really).
The OP needs to post screenies of disk activity.
And how long since you last restarted? Not long I'm guessing.