Romanesq1,
Thanks for pointing out the streaming buffer size setting in the preferences:advanced tab of iTunes. This solved my problem, which started when I got a new AirPort Extreme/n base station (under iTunes 8 with Leopard). I thought maybe there was an incompatibility with my old Express. Updated to SnowLeopard and iTunes 9 and still had bad dropout problems with iTunes.
For good measure, I also turned off the sharing features which I don't need.
Thanks again! One less frustration. - Genea