Itunes Media Folder location on external hd but computer hd still losing space

Hi, im importing all my old CDs to my itunes, however as my computer's hard drive was getting too full, i've changed my itunes media folder location to an external hard drive. but now, even though the music is being saved to an external hard drive, im still losing space on my computer's hard drive. Why is this happening? and how do i prevent it? Thanks

By organizing it should both relocate all current media as well as start using the new location from that point on.  You're mostly okay there.  Where you are not okay is iTunes doesn't look at your files directly.  It only really looks at one single file, the iTunes Library.itl file which tells it where everything is located.  You need to get both copies of iTunes using the same complete library (media + library file).  The way you do that is using the option start method.  You should only need to do that once unless for some reason the library storage drive is disconnected when starting iTunes, in which case iTunes will use the default location and you will need to option start again.
What are the iTunes library files? - http://support.apple.com/kb/HT1660
More on iTunes library files and what they do - http://en.wikipedia.org/wiki/ITunes#Media_management
What are all those iTunes files? - http://www.macworld.com/article/139974/2009/04/itunes_files.html
Where are my iTunes files located? - http://support.apple.com/kb/ht1391
iTunes 9 [and later]: Understanding iTunes Media Organization - http://support.apple.com/kb/ht3847
By the way, both copies of iTunes will have to be the same version or the library will become unreadable to the older iTunes.
There are variants to the above but I am not going to type in all the possibilities unless you say something that tells me you need a different structure.

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    FrustratedAJM3 wrote:
    Setting up a new Mac. I already have my iTunes media from my previous Mac on an external drive. Went to Preferences and selected the external drive and iTunes Media folder and the files are not showing up in iTunes. Any ideas?
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    Where are my iTunes files located? - http://support.apple.com/kb/ht1391
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    FrustratedAJM3 wrote:
    Setting up a new Mac. I already have my iTunes media from my previous Mac on an external drive. Went to Preferences and selected the external drive and iTunes Media folder and the files are not showing up in iTunes. Any ideas?
    That simply tells iTunes where to put new files.
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