How to set up iTunes with an external hard drive so that there is not a double location for the iTunes Media folder

Question

Hi,
A very helpful postee got to the end of his knowledge level, so I am posting this for you tech guys to sort out. Bit long because I've tried to set it out step by step. Briefly I'm new to iTunes and my laptop has a very small hard drive and is virtually full and due to be replaced. So I want to use an external hard drive.
Now I know that iTunes installs itself to two locations: 1. Programs Files 2. Music. And its the Music location that bothers me.
I asked about using an external hard disk to store the actual AAC files. I was advised that in order to change the loaction of the iTunes media folder I was should employ preferences/advanced/ and this is what i saw (as you would expect):
Then I hooked up my hard drive, hit 'change', and this is what I saw:
I was a bit worried by the lack of pathway details, but assumed it must have done something on the external drive, so I looked on  it and this is what i saw (highlighted):
But compare this with what was in the directory I attempted to reproduce, viz in the iTunes folder in /laptop/Music/iTunes:
A ton of stuff. The only stuff that corresponded with what iTunes had created on my external hard drive was in Music/iTunes/iTunes Media folder:
Now this suggests that there are TWO locations for my preferences. The advanced tab only allowed me to ADD an extra location, not REPLACE the original.
So:
1. Which of the two locations will iTunes choose when I add music? Surely it will go with the original pathway laid down in the directory when iTunes was installed, and ignore my external Hard Drive? I mean, how can there be two automatic locations?!!!
2.. I don't mind itunes library being on my laptop as this is just a list, but it obvoiusly has to have a pathway to the site where the actual AAC files are stored.
     so surely it won't work unless the whole lot is on the external hard drive: library, extras, genius, the lot?
4. How then do I get it all on the external since merely changing "preferences" doesn't do the job?
5. Is this perhaps the reason why so many people report that iTunes does not recognize their external hard disk:
http://www.ehow.com/info_12199596_external-hard-drive-not-recognized-itun es.html
I just don't want this to happen to me. Any answers?
Philip Joy
UNITED KINGDOM

Answer 1

As I've replied to your other threads...
Easy method 1:
Move or Copy entire working library from current location to the root of your external drive. Press & hold down shift (option on a Mac) as you click the icon to start iTunes. Click Choose when prompted, then browse to ..\iTunes\iTunes Library.itl on the external. If you copied the library across then test your new library works properly after renaming the original folder, before deleting the original folder to recover space.
Easy method 2:
If you haven't really started to build your library. Press & hold down shift as you click the icon to start iTunes. Click Create. Browse to the root of the external drive. Create the library as ITunes. Drag your media into ..\iTunes\iTunes Media\Automatically Add to iTunes.
Complex method:
Required if you've already tried other things and now have media & library scattered around. See the post make a split library portable.
in addition...
In all cases the idea is to get a library folder called iTunes containing a media folder called iTunes Media with all media inside this media folder. Once you have the library in this shape it is easy to reconnect to the library with the shift-start-iTunes method if the drive letter changes, move the library to another computer, and backup the library by cloning the folder to another drive.
tt2