"iTunes music" folder inside "iTunes"

in iTunes preferences i have  /Users/me/Music/iTunes for my iTunes Media folder location
inside this folder i find a folder called "iTunes Music" that contains: duplications from the "iTunes" folder (in the higher level), songs/albums which are exclusively there but not linked from iTunes (when i ask i tunes to "reveal in finder"), and some which ARE linked from iTunes -- so, i cant really understand the logic of it.
something tells me it got to do with the home sharing, because i find there some tracks from other libraries/computers... but all and all, it takes some lots of space on my HD, and i would be happy to know if there's a way to consolidate all of it into one folder and get rid of the duplication.
thanks for the help!

Here are typical layouts for the iTunes folders:
If you have upgraded from version 8 (or earlier) to iTunes 9 (or later) at some point, then your media folder (everything inside the red outline) may still be called iTunes Music instead of iTunes Media. The extra Music folder inside the media folder is used if you have allowed iTunes to Upgrade to iTunes Media Organization (iTunes 9) or used File > Library > Organize Library > Reorganize files in the folder "<Media Folder>" (iTunes 10). Depending on your choices for Keep iTunes Media folder organized and Copy files to iTunes Media folder when adding to library plus a little bug in which one build changed the name of the file storing the choice of layout it is quite easy for some of your files to be organized according to one layout and some the other.
Assuming you're happy letting iTunes organize your files the following steps should tidy things up (should it be necessary):
1. Select File > Library > Organize Library... > Tick Reorganize files in the folder "<Media Folder>" and click OK. Skip if this option is greyed out (already upgraded) or you prefer the older layout.
2. Select File > Library > Organize Library... > Tick Consolidate files and click OK. This will bring any files currently organised outside the designated media folder into it.   NB This will create duplicate copies of any file that needs to be consolidated, and you will need to manually clean up afterwards. If space is at a premium try Doug Scripts has something that will move files rather than copy them.
3. Select Edit > Preferences > Advanced tab, uncheck Keep iTunes Media folder organized and click OK.
4. Select Edit > Preferences > Advanced tab, check Keep iTunes Media folder organized and click OK. This triggers iTunes into reorganizing everything according to your preferences.
5. (Optional) Close iTunes, rename the folder iTunes Music as iTunes Media then restart iTunes. Check under Edit > Preferences > Advanced tab that the location has automatically updated. If you can't access the media for any reason just undo the folder rename. (Assumes you don't already have a folder called iTunes Media and that iTunes Music is the currently designated media folder.)
PS If you really prefer the older layout, but it is already in the new one then edit the file called .iTunes Preferences.plist in your media folder and change the integer from 1 to 0 before doing step 3.
tt2

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