I found this fix in an older post. It talks about iTunes 7.2, but I just did this with 7.3 and it fixed the issue. Thanks to blackinches for the post!
Just a public service announcement:
Don't blame this problem on the G15 or Logitech, blame it on Apple--they broke the media key button functionality. I have an aging Logitech Elite and since updating to iTunes 7.2 I've noticed the same problem. In iTunes 7.1, the media keys worked, but there was a bug with the Mute button (search Google for "itunes mute" or check here:
http://thegreenbutton.com/forums/thread/184340.aspx ).
I sent Apple a message regarding this issue and urge everyone else bothered by the broken media key functionality to do the same:
http://www.apple.com/feedback/itunesapp.html
Until Apple fixes this bug themselves:
-----------------------------------
HERE'S A WORKAROUND--->
http://notbedwell.com/cgi-bin/forums/YaBB.pl?num=1180585710
-----------------------------------
In case that link goes down, the solution is as follows:
"Just make a folder in your iTunes directory called "Plug-Ins" and drop the mmKeys.dll file inside it. Restart iTunes and your problems should be gone."
Download mmKeys.dll from one of these locations:
http://notbedwell.com/forums/Attachments/mmKeys.dll
http://www.umr.edu/~jdsb8c/mmKeys.dll