Even Apple, with the knowledge that comes from OS X, where people don't run as root/admin by default, has managed to screw up permissions in iTunes.

I bought my daughter an iPod Shuffle for her birthday. She's set up (under Win XP) as an ordinary non-admin user. She tried to change the CD rip format from AAC to MP3, and she got a permission error. I had to log in as admin, and change the default rip mode for her. She was then able to rip to MP3.

Even those who (should) know better screw up.