How to centralize mp3s & itunes on a single machine

I tried to do something similar a year or two ago. It was an exercise in futility and it ended up just making a mess of things. Granted my situation was slightly different in that I wanted the library to be centrally stored on a WHS share, but I found that ITunes pretty much wanted to do whatever it wanted to do, and if you had any ideas other then the way that it was design, then you are SOL cause Steve Jobs didn't want it that way and he knows best.

IMHO ITunes is an absolute pile of crap of an application when it comes to maintaining music. For all the love Apple gets for its UI design, how they ever came out with the ITunes application design beats me.

Yep the reason you cannot find much on this around here is that probably most of us avoid Itunes. It is probably great for your wife and her needs but for any computer enthusiast it becomes a major limitation and this is a good example. My best advice would be to get you and your wife on the same plan in terms of dealing with digitized tracks and work from there. If you decide to ditch Itunes then the plan of stripping DRM and organizing the tracks becomes more realistic since it will be a one time cost (of your own time)... it would not be realistic to have her keep downloading Itunes tracks and asking you strip DRM and reorganize.

I can kind of give you an idea of what you'd need to do. I'll answer your questions and give the problem you will have by doing it. I'll give you my solution at the end.
You can move her tracks from her itunes folder and mix it in with the non-itunes tracks. When you move them her current library won't know where they went. iTunes will still keep that music on her iDevice until you remove the track from the library.
There are two ways to do this I will explain later.
Yes/No

Here's what I would do.

1. Copy all of the music to the "server" in the folder format you outlined earlier.
2. Add your itunes music from your itunes folder if on windows "C:\Users\\Music\iTunes\iTunes Media" into the servers folder structure. *NOTE: If you purchased a lot music during the DRM days on iTunes.... realized I probably shouldn't explain how to strip DRM off of iTunes music....Google is your friend.
3. Install iTunes on each PC/MAC
a. Click on Edit\Preferences.
b. Click on the Advanced Tab
c. Make sure "Keep iTunes Media folder organized" and "Copy files to iTunes Media folder when adding to library" are unchecked.
4. Add folder to library pointing it to the Music share.

Any purchased music will be on the client PCs and need to be copied over to the server as all purchased music will automatically be added to the client's. This however can produce duplicates for the purchaser. Transferring music to your ipod will take longer as it copies it over the network and you will lose the ability to play music from your laptops unless you check the copy files checkbox.

First, let me give a +1 for hating iTunes, but my iPhone likes it, so I use it . And, honestly I find Windows Media Player to be just as maddening...

Anyway, I recently did something similar to you. My situation was a little different, as my library is smaller. 90% of it is ripped CDs. I am also using WHS 2011, but Win 7 should work similarly.

Anyway, here are some links that I used to get started -- maybe they will give you some more insight.

http://www.chazdavis.com/blog/projects/host-itunes-from-your-file-server/

http://thedocsworld.net/whs-meets-itunes/

I haven't done this but it may be worth a shot. To start with move all the files to the server. Strip DRM. Close itunes account, open Amazon account. Last, the reason I'm posting: look at J River Media Center. I love it and it has a server function, may be a good way to keep everything synced. I use JR on 3 computers, but each have local music files. I'll try to look into the server function tomorrow and see how that works.

May I suggest using Microsoft SyncToy. I was/am in the same situation. I created relationships between folders on all computers in the house and the shared folder on the WHS. I then set it up as a scheduled task so they are synced daily.

While I also find iTunes to be a PITA, you can authorize the PC you are using on more than one iTunes accounts.