I had the exact same problem and came up with this solution:
Close itunes
Go to Start > Control Panel > Administrative Tools > Services
Look for IMAPI CD-Burning COM Service and open it (double-click it):
> If not started, start it by clicking the Start button
> Select Startup Type as Automatic
> Go to Recovery tab and set first, second and subsequent failures to Restart the Service
> Click Apply and then Ok to close window
Look for iPod Service and open it:
> If not started, start it by clicking the Start button
> Select Startup Type as Automatic
> Click Apply and then Ok to close window
Restart itunes, try burning a cd from a playlist in itunes. There is no guarantee that this will solve your issue, but it is worth a shot, it has worked for me so far.
You can also see my solution posted on itunes forums:
http://discussions.apple.com/thread.jspa?threadID=1445052&tstart=0
This is a reply to:
Hi Everyone
Hope this is the right forum for my problem, if not perhaps you could redirect me?
Whenever I attempt to burn a CD my computer totally freezes, failing to respond to CTRL+ALT+DLT, so I have to turn power off. I'm using iTunes, but have tried Windows Media Player also - same result. I have successfully burnt disks in the past but I never know whether it will be successful or not so I've wasted a lot of CDs.
I don't get any error message - it appears to start by checking playlist then initializing disk and then it freezes. I've checked all sorts of settings on computer (to be honest don't know what they all mean) - so I need idiot speak please!
Have run CD diagnostics - no problems show there.
I'm using AMD Athlon(Tm) XP 2000+, 1.67 GHz 224 MB of RAM, Microsoft Windows XP Home Edition, SP2, Modem: Intel(R)536EP
Hope someone can help, thanks.