ITunes sharing with multiple users on one iMac

I have a sizeable library that I would like to consolidate on our new iMac and allow four users (my family) to use the one library in their respective iTunes. There was a post last year for a solution to use aliases to accomplish this and I followed the steps as best I could. It sort of worked but I must have started with my iTunes library in a different location because it didn't work out as easily as the article shows.
http://discussions.apple.com/post!reply.jspa?messageID=10283304
In order for the music to show up in iTunes even for the first user account, I had to "add" the music to library from the new location (the alias) essentially creating a new library. I guess that is due to the location of the extra files (e.g. library, extras, etc.). For the above method to work, where exactly do the library files (not the actual music files) need to be? Also, is there a way to use that folder called "Automatically Add to iTunes?" And lastly how do I reset some features, like playlists, using Time Machine? There doesn't seem to be much info into the advanced use and trouble shooting of iTunes.
I appreciate any help someone can provide.

Thanks but that doesn't really answer any of my questions. That method does not allow you to add songs from any account. You still have to manage multiple "library" files, add songs to the library manually for each user, and you end up with duplicate songs. The method that is linked in my previous post is a great one, I just need to know where the library files go in relation to the actual songs (meaning inside or outside of the iTunes folder). I guess I need to know how iTunes is set up "out of the box" since I have moved some stuff around and the data files and the music files are in different folders than they were (or would be) in a new installation.

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