ITunes 7 deleted "Downloads" folder of music from iTunes and iPod

Question

In iTunes 6 I had iTunes point towards "My Music" folder in windows for my library.
One of the folders in "My Music" was called "Downloads".
NB: the music in "Downloads" is NOT my music downloaded from the iTunes Music Store... it isn't copy protected etc...
Upon upgrading to iTunes 7, i got !'s next to all my 'downloads' music.
I checked the folder and non of the music was there... all completely gone.
I do have a back up of this music, so not all is lost, but the backup is at home and I won't be able to get it for a few weeks.
So in the mean time, I plugged my iPod in, hoping to copy the downloads music off it to use until i could get my backup.
When i plugged my ipod in I got that nice new overview screen of whats on your ipod and it told me there was an update available. Ok thats cool, I'll download it an install it later (so i chose that option...)
As soon as I had done this, the iPod started updating itself and poof... all the downloads are gone of the iPod!!
Ive never had this happen before, usually if there is music on the ipod that isn't in itunes it just leaves it in there and syncs what is in my library.
I then went back to the Downloads folder in My Music to do some investigating. It turns out there were some itunes related files in there. What! iTunes deleted my "Downloads" folder, and replaced it with its own one? Grr...
Unfortunately i didn't write down what those files are, but I believe they were the files for the iPod update.
The update of my ipod actually failed and i can't get it to work... and since that has happened, the downloads folder isn't even there at all anymore. My guess would be that if i could get itunes to do the update again, the folder would reappear with those files again.

Answer 1

HERE IS A way too long diplomatic rant:
This is my third post on this subject. This is a real problem. And it strongly appears (based on what I've been reading from others, plus my own experience) that the new iTunes is the culprit.
But this problems is not limited to a folder named 'Downloads'.[/b.] ITunes, somehow, and for some reason, will delete entire album folders of music in the default 'Music' directory.
Here's what happened to me. Mind you, this involves music I converted to MP3's from CD's I own. I buy about ten-twenty CD's a month, so this is not some Orwellian nightmare affecting merely downloaded songs--purchased or otherwise.
Here is a typical example of what's happening:
BEFORE iTunes v7 was installed:
-An 'Artist' folder named 'A Perfect Circle' contained the following 'Album' folders: 'Mer De Noms', 'The Thirteenth Step', 'eMotive'
SHORTLY AFTER iTunes 7 (about a month or so ago):
-Perfect Circle folder contained only the eMotive album. The rest were gone: this means not in the trash. Not moved. No where on the HD. Simply zapped.
I've lost MP3 albums from purchased CD's from Bob Marley, Led Zeppellin, Bjork, etc. It has affected at least 50 artist folders. I rip entire albums that I buy: I'm not trying to pass judgement though. I just want the point to be driven home that this bug is big, and it's affecting people who have spent much time and energy legitimately converting their music collections.
Am I missing something? I know I'm not alone in this, but this bug doesn't seem to be getting the attention it deserves from Apple. This is a major screw up. HAS APPLE RELEASED A STATEMENT? Forgive me if it has. But I can't find it. Maybe it's right under my nose?
Anyway, I do have all my music backed up on CD's and DVD's where they can't be corrupted. And all those discs are copied and stored in a remote location, in case of fire. This might seem extreme, but when you've spent a year of your life converting hundreds of albums and tagging them meticulously, you don't take chances. The only problem with this backup method is that my backup is spread out over many, many read-only discs. Moving it back to my hard drive will be laborious.
Can someone tell me if Apple has addressed this? Because I don't want to use iTunes at all if it is going to delete files. And I DON'T care if this is some function I'm not aware of. Any software that would delete files, either mistakingly or through some helpful feature is bad software. Deleting files (w/o even sending it to the Trash!) is one function that ought not be automated, or performed by any application other than the OS itself, under direct control from the user. I've turned off the option that lets iTunes manage and 'organize' my music for me. I can do that myself, and I don't like some of the things it does.
I have a friend in the media, and I'm thinking about issuing a press-release on this bug if further research indicates this is a more pervasive problem that Apple is downplaying. Certainly they are aware of it, as others have written on it here and elsewhere.
Can someone from Apple please contact me? I want to know when it is safe to use this program again. This problem is real, and just because it hasn't affected everyone, doesn't mean it has affected someone.