Ars has the first solution we've heard for the app-crashing problem bad enough Steve himself said Apple was working on it. Tests by Jaime Hosticka, who used to work for Apple, show that downgrading to iTunes 7.7 fixes the crashies for some people. He also got a more detailed email response from Steve Jobs—six whole sentences—about the issue.
"We do know of several bugs that we're working on for release in a month or two. I would imagine these will fix your issues. Don't worry, this will get resolved soon."
(Ars didn't publish the full email.) Apple has actually contacted him since the Stevemail to get all of his test notes.
In the meantime, if you're on a Mac and having problems, there are some hosts of iTunes 7.7 for Mac in this Apple Support thread started by Hosticka. (If you've got extra sources for 7.7 for Mac and Windows that can handle a pounding, please spill in the comments.) After deleting iTunes 7.7.1 and installing 7.7, you've gotta reset and re-sync your phone. Addtionally, Hostcka recommends deleting this files to be sure they get rewritten:
Let us know how it goes. [Ars]