I spent some time last evening troubleshooting an iTunes error on his computer. Anytime he tried connecting to the iTunes Store, it would kick back an error that it could not connect to the Internet. Googling around turned up a handful of solutions, few of which worked. Turns out the solution (in this case) was pretty simple.
In the Internet Explorer 8 LAN settings, there is an option to use a proxy server to access the Internet. For whatever reason, this option was selected as the default, causing IE8 to search for a proxy server that didn’t exist. Deselecting the option remedied the problem with iTunes. It also allowed Windows Update to find and download updates, as well.
What I don’t really understand is why iTunes even pays attention to this proxy server option. Firefox ignores this setting completely, using its own LAN settings instead of whatever IE defaults to. It’s possible that iTunes uses the IE settings to simplify network management for the average computer layperson. In and of itself, this would make sense and is probably the better option for those not completely comfortable managing the minutiae of network settings, but it seems problematic to me that Internet Explorer would have defaulted to trying to use a proxy server when, in my experience, proxy servers aren’t used all that often in networks.
Whatever the case, if you’re having trouble getting iTunes to connect to its store or with Windows Update failing on pulling down updates, make sure to check your Internet Explorer proxy settings. It’s the simplest option, by far, to troubleshoot and will likely save you a lot of pointless running around with command prompts, host files, and software re-installations.