Setting up multiple itunes users

Ok so i'll be making my first step into the Applesphere this Christmas with a new iphone for myself and ipods for my two kids. Having never used itunes before the task of getting setup is a little daunting. I want to know the best way of setting up so all our music libraries are separate and ensure the kids are unable to access anything on there ipod touch that they shouldn't when on the app store.
I am also looking to sign up for imatch as i'd like to access my music on multiple devices and wonder how this works and any issues with multiple users. There may be times when i'd be happy to share some of my music with the kids and sometimes not.
So basically how do i get started (does each user need an apple id?, how do i separate each individuals library on a single machine, and does imatch work per library, per user or for all music on one machine)
Thanks for any sage advice.

Create a separate iTunes library for each device. Note: It is important that you make a new iTunes Library file. Do not just make a copy of your existing iTunes Library file. If iTunes is open, quit it.
Mac users: Hold down the Option key while you open iTunes.
Windows users: Hold down the Shift key while you open iTunes.
In the dialog that appears, click Create Library.
Name and save the alternate library file. iTunes opens with your brand new library file.
Open iTunes Preferences. Choose iTunes > Preferences (Mac) or Edit > Preferences (Windows).
Click the Advanced tab.
Deselect the "Copy files to iTunes Media folder when adding to library" checkbox if it is already selected and click OK. This will prevent iTunes from creating duplicates of your existing media files in the new library folder.
Add the specific media files you want on your device to iTunes either by dragging them into iTunes or choosing File > Add to Library (Mac) or File > Add File to Library or Add Folder to Library(Windows).
Once you have the iTunes Library just how you want it, connect and sync your device.
Once the sync is complete, quit iTunes.
Mac users: Hold down the Option key while you open iTunes.
Windows users: Hold down the Shift key while you open iTunes.
Click Choose library.
Choose your original iTunes Library and click Choose (Mac Users) or Open (Windows Users). You can now switch back and forth between the different libraries for different devices.
http://support.apple.com/kb/HT1495

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