My set up is a desktop wired (no wifi connection) to the router with an iPad2 and an iPhone 4
As I mentioned before, unchecking the "Open iTunes..." box did the trick for me but it wasn't instantaneous. Intially it didn't seem to work but all of a sudden my iPhone became visible in iTunes. I restarted the iPad and closed/reopened iTunes and a short time later the iPad showed up in iTunes. It did lose the iPad again but a reset and iTunes reopen solved that and they have been there since.
If the devices are visible in the LH pane w/o USB cable, it is connecting via wifi. If not, I know it is frustrating but review everything...
Wifi sync box checked, close iTunes, plug device into charger, reset device, open iTunes, turn device on AND wait to see if it shows up in the LH pane. If it does you are connected.
If it shows up, make some changes in iTunes, ie playlist and give it a few before seeing if the sync button is available.