iTunes is a hog.  Sounds like your system is lagging the music.

I know iTunes is a hog. With 4 GB of RAM I would think that would be a moot point. I rather dislike WMP or any other music player. Is there a fix? I've used iTunes on other systems with less RAM with no issues. Maybe RAM is the issue? XP doesn't see all 4 GB because it's not a 64 bit system.

I doubt that RAM is a problem, more likely either a busy CPU or perhaps a busy hard drive.  I don't know if iTunes has a buffer setting in it, you might try checking any options/preferences for a buffer setting that you can increase.  If you have a second hard drive (even an external or a thumb drive), you might try moving a couple of songs over to the second hard drive and playing them while surfing to see if that fixes it.  Also, if you're running the iTunes with any sort of equalizer or sound enhancer, you might try turning that off (which will reduce cpu usage).

You can try running task manager or another cpu monitor while you're running iTunes and surfing to watch the cpu usage.  If it's sometimes pegging towards 80-100%, there's your problem.  You'd need to figure out a way to cut down iTunes usage, or switch to another player.

Oh ya, if you're using any visualization-type things, try running with those turned off.

Wouldn't hurt to try another player, just to verify that iTunes is the culprit. (read: POS)
WinAmp classic is always a brilliant choice.

I don't have any other players installed. Did that on purpose actually.

Well, install one.

I installed a different player with the same results. Songs just skip. Seems the hard drive can't keep up. Is there a way to increase the buffer size? Please note this only happens while using Windows. While using Linux the music plays just fine.

I also uninstalled AVG. I thought the constant scanning might be stressing the hard drive. It didn't help.

I'd still look at Task Manager to see what's going on with cpu usage, if nothing else just to rule it out.  Might be something else sucking up the processor too, maybe even some Fireflox plugin.

Here are a couple of pages from the iTunes support that might be helpful in troubleshooting:

http://support.apple.com/kb/TS1362

http://support.apple.com/kb/TS1421

Yeah, I tend to think it's more likely a CPU issue rather than the HDD, which runs at 7200rpm and should be capable of keeping up just playing music and checking out the net, etc.  I'd check in Task Manager to see what is hogging your CPU if I were you, and see if you can reduce the CPU load by eliminating any unnecessary processes.  As I understand it, iTunes has a fairly heavy footprint, so you may need to use a player that's not so resource intensive if cutting back background processes doesn't resolve the issue

Kona...

I've used Winamp 2x since it was 'new'....and deliberately avoided 3 which was a flop...and subsequent vers that introduced bloat.

It still plays 24/7 ....even while playing THE MOST TAXING game known to man.....aka FSX.  Ram can be at 95% [12 gig]  8 'cores' all over 50C ....all going 19 to the dozen.....and the music never skips.

Not once.

Throw that iTunes shit out.

Anything that thinks it needs an 'i' prefix to be acceptable belongs to a whole world of FAIL.

I can't do Winamp Jafo. Interface is too confusing and dark. I've been using iTunes for years with no issues.

Yeah I like programs that aren't that dark. And I don't care to mess with skins.

Besides I would have to edit all of of my 4K of MP3 files so that they would show up correctly in Winamp. Not something I want to spend my time doing.

So I moved the music to a spare 40 GB hard drive. I then installed an older iTunes version. I even took out a stick of RAM dropping the total down to 3 GB.

With music playing, Firefox open with 5 tabs, CPU is holding steady around 10 percent usage.

And the music still skips. 

I have noticed that refreshing a page in Firefox makes the CPU go to 100 percent.

Starting to think this is a Windows XP issue, yet I have downloaded ALL available updates. I really miss Windows 7.

In all honesty, your PC is just slow.  XP is legacy and I don't think the new iTunes coming next month will even support it, among many other applications.  It's not reading all your RAM so it's limited your system.

Yes I know Island Dog. I have no choice but to use this system. I was looking for the answer, not a post stating the obvious. Never had any issues on this very same machine a year ago.