Apparently it only works on unencrypted backups. Here's what I did to make it work:
1. quit itunes
2. go to the directory, temporarily rename the random-string directory that has your encrypted iPhone backup (e.g. add zzz to the beginning of the folder name)
BE CAREFUL: make sure you can change it back
3. open itunes and deselect "encrypt iphone backup"
4. let it make an unencrypted backup. you'll then be able to use the iPhoneTracker program
5. when you're done playing, go back to itunes and reselect encryption
6. quit itunes
7. go back to the backup directory and delete the newly created, unencrypted random-strings folder
8. rename the old folder (from step 2) back to its original name