Splitting music between external hard-drive and laptop?

I've just bought an external hard-drive for my ageing Powerbook, and am wanting to split my iTunes collection so I have all of my music on the external drive, and a selection (30Gb or so) on my laptop, for when I'm on the move or disconnected.
There are several posts on this topic, but they all seem confusing and contradictory. Most people seemed to suggest using the Multiple Libraries function in iTunes, so this is what I did. I set up a small library file for the music on my laptop, and a larger one for the music stored on the external drive, which I can switch between by using the Option/Alt key when loading iTunes.
The problem is, iTunes doesn't seem to allow you to have different Music Folders for each of these libraries. So if I change the destination for my Large Library so that music is sent to/stored on my external hard-drive, it also changes it for my Small Library - and vice versa. So iTunes is constantly loading up with the wrong default settings, and if I try to correct it, it starts laboriously re-labelling my entire library. It's now telling me half the music I know is on my laptop can only be found on my external.
I realise I could just unselect the "Keep iTunes folder organised" and "Copy to iTunes Music folder" options, but this would mean having a mass of music labelled on my laptop that's not actually there when I don't have my hard-drive plugged in, with the Missing Excalamation Point Of Death taking over my screen. I do not want this.
Is there no simple way to have music separated into two places, and my computer show me what's actually there? It ain't rocket science, is it?
All assistance gratefully recieved.

There is a KB doc from Apple: http://docs.info.apple.com/article.html?artnum=304447. The KB doc shows how to add a second (or third, etc) to your iTunes app. This is what I've done so I now have a library that uses my external drive for normal usage at home and syncing my iPod and iPhone. The second library is used for just music when I'm on the road. Hope this helps.

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