Saving itunes files to external hard drive

Ok, hopefully someone can help me with this:
I have already saved my cd collection (nearly 8000 songs) onto an external hard drive that has over 90 gb using WMP. I am trying to convert the wma files to mp3's to put them on itunes so I can get them on my new ipod. I installed itunes onto the external harddrive hoping that when the files converted they would stay on the external harddive.
For whatever reason, when the files are converted, they go onto my C drive (which only has about 15 gb) so I can't get all of my files converted without filling up the disc.
What I need to know is how I can move the converted files over to my external harddrive and possibly change the prompt on itunes as to where to save those converted files while still keeping those files playable.
If what is mentioned above is possible, please let me know how I can do that. If not, do I have to reinstall itunes and what in specific should I do in the install process to get the files saved to where I want them?

Mark
I am having difficulties saving my music collection on to an external hard drive or on to ZIP disks. How do you do this? The help section on Itunes only talks about saving to a CD or DVD.
Any help would be appreiated.
Thanks

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