How to use itune library from an external drive ?

I have an old old computer that works perfectly fine on window xp and I will like to keep it. However, the disc space on the pc is LESS than my IPOD. I will like to move my library to my external hard disk and wondering if it is possible and if itune could operate with the library from an external hard disk.
I have a 80GB video ipod and a 4GB ipod shuffle, 500GB external hard disk and 30GB PC.
thanks for your help.

Hello,
I have read several posts which ask questions about the same problem that I am having however the answers do not quite cover the exact problem and I am hoping that someone can help me.
I have successfully moved my itunes music folder to my external hard drive and I know how to consolidate the itunes library so that it contains all of the music from the music folder on the hard drive however it then loads the music back onto my C drive as I play it from itunes. Also, when I try to consolidate the music from the external hard drive it tells me that I need to have that much space on my computer or it cannot transfer. There is not enough space and that is why I want to move everything, including the library to my external hard drive. When I tried to move the itunes library I could not move it from my C drive to the external hard drive.
I really want to move the itunes library onto the external hard drive with the itunes music folder and operate both from the external hard drive. Is there a way that this can be done?
Many thanks,
Sarah

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