What is the iTunes Library?
iTunes library means everything for iTunes. It's a database to store all valuable information and files to organize music and other things. Therefore, it could be as large as gigabyte depending on how many music you have. Although iTunes library is a giant, it only contains two files: iTunes Library.xml and iTunes Library.itl.
Where iTunes Library Files Locate
The two library files locate at the same folder, but have different path for Mac and Windows machines. They are used by iTunes for different purposes. See below for more information.
Mac OS X: /Users/USERNAME/Music/iTunes/
Windows XP: C:Documents and SettingsUSERNAMEMy DocumentsMy MusiciTunes
Windows Vista: C:UsersUSERNAMEMusiciTunes
Windows 7: C:UsersUSERNAMEMy MusiciTunes
iTunes Library.itl file
The extension name "itl" means exactly iTunes library. However, prior to iTunes 10.4, The iTunes library has no such extension name in Mac. Since it's a database file, iTunes Library.itl is indispensable for iTunes. It stores information of your songs, playlists, and some song-related information. If you removed this file, iTunes will create a brand new one, so any playlists, song ratings, or other information is lost.
By creating multiple iTunes libraries, you will have multiple sets of iTunes library files - in different folder. You could choose to open which library by holding down Option (Mac) or Shift (Windows) key when run iTunes.
Note: You can restore your iTunes library with Time Machine in Mac, because iTunes Library.itl is the only iTunes library file that is backed up by Time Machine by default.
iTunes Library.xml file
XML was designed to transport and store data. iTunes uses this well-organized and easy to understand format to communicate with other applications such as iPhoto, iDVD, and iMovie. Therefore, you can easily add iTunes music to your projects.
iTunes Media folder
iTunes now doesn't only means music, but also video, books, podcasts, etc. Besides iTunes library, iTunes also use an iTunes Media folder to store other data. You will probably get these stuff in iTunes Media folder:
1. Music and Artworks Ripped from CDs.
2. iTunes Store purchases.
2. Any other items you imported into iTunes (requires the option to "Copy files to iTunes Media folder when adding to library" in iTunes Preferences).
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