Have just upgraded to iTunes 9.2 in order to upfarge my iPhone 3Gs to os4.0 and have now noticed that if I try to d'ld anything on iTunes on the PC the router continually resyncs until I abandon th d'ld when everything returns to normal. This Apple upgrade appears to be a can of worms. I also, along with many others apparently, have lost WiFi connection with the router once upgraded to os4.0
I know this isn't much help, but I dabbled with iTunes 9.2 and iOS4, with a 3GS for a couple of days, and didn't have the problems you are experiencing. I probably won't be able to help with then tech stuff, but what router do you have?
Edit to add - I also have a 2700, and it's been fine.
2wire (5.29.107.12 - security WPA-PSK encrypt TKIP) currently connected that is having the d'ld issues with iTunes but am able to WiFi connect with iPhone (now os4.0).
Earlier today when I first upgraded to os 4.0 I was using my Netgear DG834GT but could not connect WiFi with iPhone after it was upgraded to os4.0 although previously it was perfectly OK. I treid both WEP and WPA-PSK security settings but to no avail.
I am using Mac OS X and I've not noticed any issues with iTunes 9.2 or wifi with IOS 4 . Joe having you any more links or information?
Found one ;D
http://discussions.apple.com/thread.jspa?threadID=2465597&start=0&tstart=0
but no solution
In my research on this router, I found an item here (http://bt2700hgv.tripod.com/112.htm), which is about downloading large files via torrents. It may apply to large itunes files too.
May be worth a try.
Cheers
Pete