When installing Lion's version of Xcode (4.1) you may get an error that iTunes must be closed before installing (even if it appears to already be closed).
This is pretty frustrating since I had no other applications open during the install. But in Activity Monitor, iTunes Helper (the Start up Item I always forget about) was still running. Force quitting that will let the installer finish. Just an FYI for those trying to install.
[crarko adds: I'm guessing this conflict is caused by the ability of both iTunes and Xcode to communicate with iOS devices (soon wirelessly).]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20110721083509698