Update: Thanks to Dave Makower for a workaround. Per Dave's suggestion, I signed out of the Apple Store and signed back in as my account @mac.com. This is the default, so signing in with just my account (without explicitly typing @mac.com) should worked just as well, but apparently it doesn't. Thanks, Dave! I hope short names work properly in iTunes soon. Or perhaps it's just that I used a different login name when I initially downloaded the software...

Update 2: from Kevin Ross:

Hi, I'm emailing to let you know that I had similar problems updating apps. My solution was to go through the app store and "buy" every app over again. I did it with all my free apps first and they all upgraded fine, then I did it with Super Monkey Ball, iTunes saw that I already had it, told me so and said I wouldn't be charged, and installed the upgrade free of charge. Just a little tidbit to help you out in case Dave's workaround doesn't work later.

I just discovered that iTunes 8 makes large strides in handling videos. Previous versions were unable to change the Movie/TV Show/Music Video type flag, or set Show, Season, or Episode. v8 adds all these capabilities. I no longer need Set Video Kind from Selected from the most excellent Doug's AppleScripts for iTunes, and can now sort out imported video from iTunes' Get Info window.

Additionally, iTunes used to say it had over a dozen application updates for me, but fail to access my account or say I had none when I tried to get them. Now it shows me 19 updates, and seems to have the correct list, although it cannot actually install them. It appears to be something about upgrading free applications, which was broken last week (in different ways) too.

Here is what happens when I click Download All Free Updates:


Here is a bogus tooltip for Life (not necessarily related to the updating problems):


And a message telling me I cannot get Life 1.0.3, apparently because I don't have an earlier 1.x version of Life (actually, I have 10.0.1). I get this for every app.

Individually, I am able to upgrade free apps -- I don't mind paying their full price of "Free". I'm not willing to test Apple's bugs to find out if Apple they would really re-bill me for what should be free upgrades to purchased apps, though, as this erroneous message claims. Here iTunes told me I cannot get the free LifeGame for free; I get the same message for every app, free or purchased.

You do not qualify for this price.

To make the problem even more aggravating, App Store on the iPhone has the same issue -- when I try to upgrade Twitteriffic Premium or Toy Bot Diaries, it tells me I'll have to pay full price. I want those updates! I hope this is sorted out soon.