I also had this pop up. (Followed instructions on reinstall from further down/up this thread.)
One thought I had was - could this have been caused, perhaps in some small part, by the forced download of U2's new album? Could the program (iTunes) be actively looking for mobile devices to dl to? And when it can't locate any or can't properly connect, it fires off this error message. Perhaps that's why turning off an iPad then reinstalling iTunes seemed fix the problem.
Just a thought. At any rate, thanks Robes for the fix!
Here's Apple's support documentation – pay attention to the "fine print": Remove iTunes gift album "Songs of Innocence" from your iTunes music library and purchases (http://support.apple.com/kb/HT6439)