The file "iTunes Library.itl" cannot be read because it was created by a newer version of iTunes

1. Quit iTunes.

2. Locate your iTunes folder.

Operating System Default location of iTunes Folder
Microsoft Windows XP and 2000 Documents and Settings[your username]My DocumentsMy Music

Microsoft Windows Vista Users[your username]Music
Microsoft Windows 7 Users[your username]My Music

3. Open your iTunes folder.

4. Drag the iTunes Music Library.xml to the Desktop

5. Drag the following file from your iTunes folder to the Trash:
Microsoft Windows "iTunes Library.itl" (in versions of iTunes prior to 4.9 this was called "iTunes 4 Music Library.itl")

6. Open iTunes.
Important: Do not add any content into iTunes at this point.

7. Choose File > Library > Import Playlist.

8. Navigate to the iTunes Music Library.xml file on the Desktop.
Windows users: Click Open.

Follow these steps:

1. Quit iTunes.

2. Locate your iTunes folder.

For Microsoft Windows XP and 2000 the iTunes folder is stored in

System drive\Documents and Settings\username\My Documents\My Music\

For Microsoft Windows Vista the iTunes folder is stored in

System drive\Users\username\Music\

3. Open your iTunes folder.

4. Drag the iTunes Music Library.xml to the Desktop

5. Drag the following file from your iTunes folder to the Trash:

Microsoft Windows: 'iTunes Library.itl' (in versions of iTunes prior to 4.9 this was called 'iTunes 4 Music Library.itl')

6. Open iTunes.

7. From the File menu, choose Import.

Note: Do not add any music into iTunes at this point.

8. Navigate to the iTunes Music Library.xml file on the Desktop.

9. Click Open.

After re-creating your library, any devices that you sync with iTunes (Apple TV, iPod, etc) will see your iTunes library as a new library and will completely re-sync.