Managing two libraries

hi there,
I am having problems managing two libraries. I am trying to create two separate libraries, AAC and Lossless. I was given the advice below, which I followed, problem is when you switch back and forth between the libraries, if switches songs from my Lossless library which are stored correctly in the Lossless folder to files from the AAC library and vice versa.
Also, each time you switch libraries you have to go to advance preferences and indicate where you want to store the files. Example, I have the Lossless library open, the preference is set as G:/music/lossless; when I exit that library and open the AAC library the preference is set to the Lossless library. I don't mind changing that if I have to but the problem of the libraries switching content from AAC to Lossless is the big problem. Any advice?
PREVIOUS POST INFO:
Do this.
Create 2 folders on the external.
G:\Music\Lossless
G:\Music\AAC
Hold Shift (for Windows), Option (for Mac) and launch iTunes
Select Create new library and select the AAC folder you created above.
This will create a new iTunes folder in G:\Music\AAC. You should now have G:\Music\AAC\iTunes\.
Go to Windows Exploder and move all your AAC files into G:\Music\AAC\iTunes\iTunes music\ folder.
Go to iTunes menu File -> Add folder to library and select G:\Music\AAC\iTunes\iTunes music\.
Quit iTunes and restart holding Shift (for Windows), Option (for Mac).
Select Create new library and select the Lossless folder you created above.
This will create a new iTunes folder in G:\Music\Lossless. You should now have G:\Music\Lossless\iTunes\.
Go to Windows Exploder and move all your Lossless files into G:\Music\Lossless\iTunes\iTunes music\ folder.
Go to iTunes menu File -> Add folder to library and select G:\Music\Lossless\iTunes\iTunes music\.
Next time you launch iTunes hold Shift* (for Windows), Option (for Mac) select Choose library and select teh iTunes library.itl file in teh folder you want.
Make sure you first set your Import prefs to AAC or Lossless, depending on which folder you are in.

I have a similar situation. I have a 8gb ipod touch and a 30gb ipod video. I only have one library and what I did was to have the video sync with my entire library (about 25 gb). For the touch, I have it sync only playlists that I select. (You can edit how a ipod syncs when you connect to the computer) this setting is under the music tab.
If you want to move the library off the computer, make sure you follow apple's instructions.
http://support.apple.com/kb/HT1449
For the photos, each ipod can be setup to either sync the entire library or selected events. the settings for this are under the photo tab.

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