I’m the guy that reported the password problems with iTunes 5. I’ve been doing some experimenting, and I think I know why nobody else has replicated this.
iTunes 5 will indeed connect to a password-protected mt-daapd share. However, once it has done so, if the password for that share ever changes, iTunes continues to send the old password. Upon being rejected, it simply gives up, with no error message, and no prompt to supply a different password.
Any ideas? Is there a way to make iTunes “forget” saved passwords?