Thanks to Mark, this annoying feature of itune is disabled.
Either use Mark's windows App or follow these steps:
- Locate iTunesPrefs.xml by going to Start->Run and typing %appdata%\Apple
Computer\iTunes and hit OK. - Backup iTunesPrefs.xml
- Open iTunesPrefs.xml and search for <key>User
Preferences</key> - Under the next <dict> add the following:
- <key>DeviceBackupsDisabled</key>
<data>
dHJ1ZQ==
</data>
- <key>DeviceBackupsDisabled</key>
- Save your changes and restart iTunes. Auto-backup is now disabled.