Probably I missed something, but I can't sync any apps. What I did:
- installed latest xcode+iPhone sdk 4.2
- installed latest iTunes for Windows (10.5.1.4)
- set up deploy target to 3.0 and current SDK to iOS SDK 5.0
- armv7 as base architecture, armv6, armv7 as available
- "build architecture only" unchecked
When I'm syncing with iTunes iPod 2nd gen with iOS 4.2.1 I have unknown error 0xE8003FFE. I tried with and without entitlements enabled. Everything works ok on iPhone 4 with iOS 5.0
Have I missed something with iCloud or some xcode settings?