ITunes, XP, multiple users, mirrored iTunes?

I have iTunes loaded on my user profile. I want my wife to have access to the same music folder, and also the same playlists. Basically, I want her iTunes to mirror mine, so that when I make changes to my playlists and such, when she logs in, she sees those changes; and vise versa.
I know how to go in to edit>preferences and find the same music folder, but the playlists don't track.
Where can I go within the harddrive in the iTunes files to find where the playlist type of information is stored?
Synching ipods is no big deal, I got that part.
Can anyone shed some light?
Thanks!

iTunes does not use the .xml file. It is simply created for other apps to access the iTunes library.
Yes, you can all use the same library on the same computer and see all the same playlists and music.
Log in to account #1 and quit iTunes.
Go to \My Docuemnts\My Music\.
Drag the entire \iTunes\ folder to a Shared directory.
Launch iTunes holding the Shift key.
Select *Choose existing library* and select the *iTunes library.itl* file in the iTunes folder you moved to the Shared folder.
Everything should work.
Quit iTunes.
Log out of account #1 and log into account #2.
Go to Windows Explorer to \My Documents\My Music\iTunes\iTunes music\ folder.
Select all the folders inside the iTunes music folder (should be Artist names) and move them into the \iTunes\iTunes music\ folder in the shared location.
Launch iTunes holding the Shift key.
Select *Choose existing library* and select the *iTunes library.itl* file in the iTunes folder you moved to the Shared.
All the music from account #1 should be there.
Now File -> Add folder to library and select the *iTunes music folder* in the Shared location. This will add all the music that you moved in to it from account #2.
It should all play okay.
Quit iTunes and log out of account #2.
Log into account #1 and launch iTunes normally.
All music should be there.
Log out account #1 and log into account #2.
Launch iTunes normally. All music should be there.
If so, go to \My Documents\My Music\ and delete the \iTunes\ folder.
You may need to verify all users have read/write permissions to the iTunes folder and all contents in the Shared location.

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    This is a hearty process to undertake, so only follow this tutorial if you're willing to go all the way to the end of it.
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    Once the library is tidied up, move the entire "iTunes" folder from your Home directory to the "//localhost" directory (The Macintosh HD) and ensure that files are on the same level as the "Applications", "Users", "Library" and "System" directories; this will ensure that the files in the library are available to all users on the machine (this also works for networks)
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    Overview:
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