This happened during a sync of my iPhone while installing some apps.  This usually happens to non-jailbroken iPhones who are trying to install non-Apple approved software OR jailbroken phones who haven't done the "Sync update".

How to fix this error and get the Sync Update

Open Cydia - Manage - Sources - Edit

Add this source: http://cydia.hackulo.us

Then under the section "Hackulo.us" install "AppSync for OS3.0" and your iTunes synching errors will be over.  This is something that really should get installed automatically with Cydia IMHO.

Now happen iTuning and syncing (but remember don't update your firmware!)