I am on a clean Mac OS X 10.6.8 machine (I erased the hard drive and reinstalled the OS yesterday). I do have to re-download a few apps, and Xcode happened to be one of the first.
I completed the configuration and it started the actual installing . It said 'estimated time: 1 hour' but when I checked after twenty minutes it was almost ready, though it had stopped. I was greeted with this:

OK, an informative error message. Just close iTunes and complete the installation, right? Wrong, iTunes wasn't running. (I do know the difference between closing a window and quitting an app.) So I tried opening and quitting iTunes, but that didn't work either. Then I had a look at the Activity Monitor, but I couldn't find a process from iTunes. What do I do now? Even the buttons to cancel the installation are greyed out, so I don't even know how to retry the installation.

PS: Clicking on the find symbol next to iTunes in the alert screen just starts iTunes.

Update

I found a process called 'iTunes Helper'. I assume that's what's causing the alert. Is it safe to just kill this process?

And I found this: http://osxdaily.com/2011/08/02/cant-install-xcode-because-itunes-fix/! That fixes it, restarting the computer will relaunch iTunesHelper. That should have fixed it, according to the linked article, but sadly, I still have the alert opened, the installation doesn't progress.

Solution 1:

OK, I solved it. So I first found this article, which said to killall iTunesHelper. That didn't work. After that I found an Apple discussions thread on this where someone had to killall AlertAll (the process responsible for the Install Alert). I did that and the installation finished succesfully.

Step-by-step

• Go through the installation and get this alert
• Open Terminal and execute killall iTunesHelper (or kill it with Activity Monitor)
• Execute killall AlertAll if the installation still doesn't proceed (Caution: after this the installer assumes iTunes is completely stopped. If it's not, things can of course go wrong. So better look over your processes list twice before doing this.)
• Everything should be fine

This was exactly what I did, if it doesn't work for you: I'm sorry, but then your issue is different and you should ask a new question.