I would guess that you have a problem with the Snap feature with Windows Aero.
You can Google how to disable it, but I'll write out a basic explanation.
Open Control Panel > Ease of Access Center > Make the Mouse Easier to Use > Enable Prevent Windows from being automatically arranged....
Now hopefully if you move the task bar like you already previous have, you can resize the window to where you want it and then move the taskbar back to the top edge.
Based on your screenshots, it looks like itunes doesn't recognize that the top portion should link to the Taskbar when its on the upper edge.
I reformatted and haven't installed itunes, so I can't even test any of this, but you might also try running itunes in Compatibility Mode.
Right click the itunes shortcut > Compatibility tab > Check Disable Desktop..., Disable Visual..., Disable Display... (Make sure all 3 are checked)
Then, of course, re-open the program and whatnot.