Well...one problem solved, just to create another one. Sorry, brother. At least you got the Basie, I guess.
As much as I love Apple products, I'll be the first to admit that iTunes can be a real motherfucker.
I wish I could help you further, but without being on your machine, it's hard to know where to start. Uninstall iTunes, and repair WMP? Maybe?
Sometimes when you have multiple media players, they tend to not play nice with each other. "Default program" and whatnot...
Are there any preference options in WMP that allows you to set it as your default media player?