Well, it's taken 2 hours, but I think I've managed to help alleviate the skipping in iTunes on the PC. Lot's of tweaking...

So, I've uninstalled a lot of old software, which made no real difference other than freeing up some much needed hard drive space. I then updated the relevant drivers for the soundcard (a rather excellent Creative X-Fi Xtreme Gamer edition (essentially, the same card as their more expensive card, but you pay a third of the price), but I've left iTunes at v7 as it's relatively stable and iTunes just seems to bloat every edition you go up. Next up was some tweaks for quicktime, forcing it to use my soundcard to do the processing it thinks it should do - this made a bit of a difference actually. I checked the page file was ok, and also turned off the fancy visuals you get in Windows, so the desktop doesn't look so good but hey, it just uses up resources. Finally, I reviewed the services list so only the stuff I used was starting automatically, and removed some apps from my startup. This seems to have cured all my ills, I now have a non-skipping iTunes and have a processor that is no longer hitting maximum usage all the time.

Talking of processor usage, I've been using Process Tamer for a year or so on the work laptop and found it to be very useful, but am trialling Process Lasso on the home PC, which is a bit more configurable and less intrusive than Process Tamer.