Increasingly ugly storage issue

Question

Ok, I posted this on another message board over the course of about a half hour last night, hoping to get some answers by the next morning. However, it was ignored. So, here's my problem, word for word.
So I consider my computer mainly a digital music library; of my hard drive's 320GBs, 230+ is dedicated to my iTunes library. Most of these files also have album art attached to them (not from iTMS). My HDD currently has 19.07 GBs available, which has been about the area it's been in for a few weeks now, or at least the 25GBs area. While it wasn't happening for a long time, lately if music is played on it for any reasonable amount of time, like 10-15 minutes, a very unreasonable thing happens: the fan starts getting really loud. Like, so loud that I have to turn my sub and speakers up to overcome it. This never really bothered me though since these were volumes I usually listen at anyway. But after being home for the first time in a while, I've arrived to find a much worse surprise.
I have a lot of music to add to my library, but everything I drag into the window freezes iTunes up. Not any music playback, although that might start to skip every 2 seconds, but just the use of the application. Music will keep playing, but I can't bring the program to the front or force quit it (because the window won't appear). Any activity in any other program after I try to drag-and-drop these files will also result in a beach ball for a good minute, although eventually the desired action will get carried out. I feel like this is something that could eventually become a much bigger problem, or I guess I'm worried it will be. I also just noticed that my iTunes on this MacBook can't load the shared library from the iMac during the freeze after waiting for 5+ minutes, but can load it in under 1 still without the freeze.
I'm running on Tiger on a PowerPC iMac G5 with a 320GB HDD and 768MB of RAM. The processor is 1.8GHz. Does this have to do with any of that being out of whack along with the HDD being 'near' capacity? Also, while I was writing this out the freeze stopped and the files started copying into my folder, but 5-10 minutes is a long, long wait to drag one folder into a database, especially when you have 59 more to go and some are very large collections.
The last bit of background, I guess, is that this was one of those models that received an extended warranty due to logic board issues, which I had and am eerily reminded of now, just without the flickering screen and slashes.
[The following P.S. notes were all individual edits to the post made over the span of 30 minutes]
P.S. I'm running iTunes 7.1 with VolumeLogic Beta installed, Safari 3 Beta with 2 tabs open and one Finder window open to my Music folder during this time. Although with VolumeLogic turned off, iTunes not playing anything and Safari not loading diddily (Wikipedia main page and an unused tab), I don't see what would be taxing my computer besides the addition of the files.
P.P.S. It isn't happening anymore, but I'm worried it could again. In fact now that it's stopped happening, I'm a little more worried, somehow.
P.P.P.S. There was a bit of slowdown just now after a few albums had worked fine, then it started showing the "copying..." status window, and then... "The iTunes Library file cannot be saved. The disk could not be read or written to" followed by "Attempting to copy to the disk 'Macintosh HD' failed. The disk could not be read from or written to." What...um, does that imply, exactly? That 18.49GB isn't enough these days? Trying it again after throwing away old copies of the other folders and bumping my HD back up to 19.05GB did the trick, you'd maybe think, but those were still two disheartening messages that really remind me of things I went through with Windows. What the F.
P.P.P.P.S. "Disk Full Alert!! Your Mac OS X startup disk has no more space available for application memory. To avoid problems with your computer, quit any applications you are not using." Like I said before, iTunes is on but only to copy files and with no plug-ins running, and Safari is open with a Wikipedia tab and an ESPN tab, plus one Finder window. With the 19.05 GB left. What's happening? Is 768MB of RAM seriously not enough these days?
iMac G5   Mac OS X (10.4.10)  
iMac G5   Mac OS X (10.4.10)  

Answer 1

"But then I wonder how iTunes manages itself if all its sources are on another HDD. Will it automatically copy files onto the MyBook? If the MyBook isn't connected, will it revert back to the main Music folder instantly?"
Suggest that you cross-post in the iTunes for Mac Forums where the iTune users hang out.