I noticed that iTunes kept locking up when I was syncing my iPhone -- to the point where I had to physically reset the iPhone (I have my iPhone set to sync everything). After some digging, I remembered that I had placed Address Book, iCal, Safari, and Mail in a subdirectory of the Applications folder. What happened is that during the sync process, iTunes was looking for the Address Book, but it couldn't find it where it expected it to be, which seems to then cause the iPhone to crash.
Once I put all the applications back in their original install locations (the top level in the Applications folder), the sync process worked without hanging.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20070714085717999