Why is iTunes is duplicating files in the "Music" folder on Windows Vista?

I've always kept my music in mp3 format in my Windows Vista "Music" folder. When I drag a particular album to itunes, it imports it and I'm able to add to my iphone. It appears itunes is making a second 'itunes copy' of the album in the itunes- music folder. Is there any way around this? Having 2 versions of all my music is killing my hard drive space.

Go to Edit > Preferences > Advanced and turn off "Copy files..."

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