As soon as an iPod or iPhone is plugged into the PC, Vista crashes and shows the "blue screen of death" (BSOD), the critical error screen on a blue background that requires a reboot to recover, users said. The errors began showing up immediately after updating iTunes to Version 8.0.
Read this thread
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Update:
Apple has posted the solution for Vista users getting smacked in the face by a BSoD when they connect iPod or iPhone to iTunes 8. What you have to do is just uninstall "Apple Mobile Device Support" and iTunes, restart, download the updated iTunes setup and install it again.
Read on Apple Support
Thanks Frylock86 for posting about it here.
This post has been edited by Jatin: 14 September 2008 - 10:45 PM

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