When I plug in a customer's IPOD touch into their xp pro machine, I get "there was a problem installing this hardware...access denied". I have scaned for viruses/spyware, made sure the account I was using was admin, tried creating a new account, ran a registry cleaner, tried system restore and every other obvious thing. This same Ipod installs in seconds on other machines. I have googled this problem to death and found that is must be some problem with permissions in the registry; however, I cannot find the right one to modify. Anyone have any ideas?

Go here and follow the instructions: http://support.microsoft.com/kb/313222/

I had the same issue with permissions and the registry with a client's PC. Not even the admin account had the correct permissions to modify / install anything. Anyways, this command will reset all security to the default and should let you install the IPOD just fine. (This could take 20-30minutes to finish running, so just be patient...) Let me know if this doesn't solve the problem.

Actually, that fix worked on a machine where it wouldn't accept video card drivers (with the same error message). However, I just tried it on the IPOD machine, and after it ran through it's paces, I still got the access denied error message while installing the drivers (I rebooted after running the fix on the link you provided).
Thanks for the help! At least it worked on one computer!

You will need to disable simple file sharing in folder options, this will allow you to manually set security polices and permissions, allow the IPod user to have permissions as the current user of the computer.

Here is the solution that worked for us:

This has occurred to me when I also noticed that a registry value in
Windows XP could not be deleted when attempting to install a USB to
serial driver.

When in REGEDIT the message "Error while opening key" would show when
attempting to view the registry value and "Error while deleting key"
when attemtpign to delete the key. Registry cleaners will not work.

Fix (Windows XP):
------------------------------
You will need admin priveledges
------------------------------
1) Open the .INF file of the device you are attempting to install,
highlight and copy (CTRL-C) the ID between the brackets {} in the line
which reads:
ClassGuid={4D36E978-E325-11CE-BFC1-08002BE10318}
Note that your ID will be different than the
"4D36E978-E325-11CE-BFC1-08002BE10318" in this example.
2) Run REGEDIT and search for the ClassGuid copied (in this example,
we search for "4D36E978-E325-11CE-BFC1-08002BE10318" )
3)Select the 0000, 0001, 0002, etc folders until you find one that
indicates "Error while opening key"
4) Right-Click and select permissions - you may receive and error
indicating "You do not have permission to view the current permission
settings for 0000, but you can make permission changes". Select Ok.
5) Select Advanced button
6) Select Owner tab - you may notice that the "current owner of this
item" indicates "Unable to display current owner" . This is the crux
of the problem.
7) In the "Change owner to" box, select "administrator" or your admin
user name
8) Select Apply, then Ok
9) In the security tab, select Add button. Select the Computer from
the Locations button and enter "Administrators" in the "Enter the
object names to select", then Ok button (NOTE: your can also enter
"everyone" but it lowers security of these settings)
10) Highligh "Administrators" and select the "Full Control" and "Read"
selections in the "Allow" column.
11) Again in the security tab, select Add button. Select the Computer
from the Locations button and enter "Users" in the "Enter the object
names to select", then Ok button.
12) Highligh "Users" and select the only "Read" selections in the
"Allow" column.
13) Select Apply then Ok again.
You will now see the entries under the 000X entry you just modified.
14) Repeat steps 3 to 13 for each 000X entry. No need to modify
permissions if you can already read them.

Restart the computer and install your device. If you still have
problems, try booting safe mode (F8 at boot), uninstall the drivers
with the problem using Device Manager, and repeat the steps above.

or simply do what I previously said worked with mine without the need to go through all that, right click on device,security,permission,advanced add permission,user,moment or two and done. Your are doing the exact same thing as what the security policy setting do. The correct way to set any permissions is how all IT personal recommend and that is using the securiy policy editor in windows, your doing the exact same thing but with more difficulty. In the security setting in any device you are doing the exact same proprieties as going through the registry looking for keys. I can take any device that was set to somebody's permissions an completely overwrite these values in the registry with a right click and a left click so why would anybody ever want to sift the registry if not needed.

Thanks for the reply. I would have used your option had I received it before I found the other one, lol.

but, still to find keys like your have is a feat on its own, just as important to know and alternative to a problem.