iTunes "Check for Update" button puts up a dialog box asking for a file

I am on Lion but had a similar problem. Based on info here: http://developer.apple.com/library/ios/#featuredarticles/FA_Deploying_iTunes/Introduction/Introduction.html , which says that 'the file selector dialog only appears only if automatic detection of iOS updates is turned off', I tried removing ~/Library/Preferences/com.apple.iTunes.plist.

This fixed things for me. Quit iTunes before you do this, and move the plist file somewhere so that you can restore it if necessary. (It may be possible to change this preference setting without messing with the plist; however, I couldn't immediately spot where to do it in the UI).

You don't want to delete the whole plist, because you'll lose all your preferences. Just change the single flag by running the following in Terminal:

defaults write com.apple.iTunes disableCheckForUpdates -bool NO

I've had the same problem updating my iPhone OS with iTunes on Windows 7. Editing/deleting the .plist doesn't help. I had to edit the Windows registry manually. The following pages were useful:

http://support.apple.com/kb/HT2102

http://support.microsoft.com/kb/136393

HKEY_LOCAL_MACHINE\Software\Apple Computer, Inc.\iTunes[SID]\Parental Controls\AdminFlags

Setting the AdminFlags to 0x0000ec00 worked for me.