My daughter and I both have an iPod;can we each have our own music library

My daughter recently got a new iPod and I inherited her old nano. I'd like to clear her music files from the nano and place music files of my choosing on it with out effecting her itunes library. We have one desktop computer; Is there any way for each of us to have our own library to use with our own iPods?

When the iPods belong to different people, there are basically two ways of using multiple iPods on a computer and these involve:
a) Sharing a single iTunes library and or user account or
b) Creating multiple user accounts.
Note: When you are sharing an iTunes library, you don't have to set each iPod to update in the same manner, you can mix and match from the options below as each iPod has it's own update settings
Sharing a Library and/or User Account
If you want to share the one library, you can set either or all of the iPods so that they only get updated with only certain playlists (you can update from more than one if you wish):
Loading songs onto iPod automatically - Windows
Choosing the update option "Sync Music - Selected playlists" allows you to create a playlist specifically for the iPod and drag the tracks you want into it. If you tire of the list and want to change it, you just add or remove the songs you don't want. The ones you take out out remain in the library to be used some other time if you choose. You can read more about playlists at these links:
iTunes: Creating playlists of your favorite songs
How to create a Smart Playlist with iTunes
Or you can choose to update any or all of the iPods manually and just drag whatever content you want to them: Managing content manually on iPod
It's also possible to have multiple libraries in a single account. To create or access a second (or more) library, hold down the Option key (or Shift key in Windows) when launching iTunes 7. In the resulting dialogue you will get the option to create a new library or navigate to the other Library.
Note: You can only have one Library open at a time and iTunes will default to the last library opened if you don't use the keyboard command to choose one. This can prove tricky when using multiple iPods, if you don't use the keyboard command you can risk syncing to the wrong library:
Using multiple iTunes libraries -Windows
Separate User Accounts
Another option is to create a separate User account for each person on your PC or Mac. Different accounts by definition would give you completely separate libraries. Each account has it's own iTunes folder, Library and iTunes Music folder and you load it with CDs etc just as you did with your original one. The iPod can be set to update however the owner chooses, sync all, manual or sync specific playlists
I don't use Windows so I can't give you a step by step on that one, however I can point you to another web page which should help you out. You can read about Windows user accounts here:
Using Windows XP User Accounts
Setting up new user accounts in Windows 2000
Create A New User Account In Vista

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