iTunes 10 for Mac: Consolidate your iTunes library
By default, the music, TV shows, movies, podcasts, and other files in your iTunes library are stored here:
Depending on how you imported items into iTunes, your library might include items stored elsewhere (in another folder or on another hard disk, for example).
You can consolidate all the files in your library in the iTunes folder so that, for example, it’s easier to move your library to a new computer.
To consolidate your library:
Choose File > Library > Organize Library.
Select “Consolidate files.”
Files remain in their original locations, and copies are placed in the iTunes folder.
To create folders (Music, Movies, TV Shows, Podcasts, Audiobooks, and so on) inside your iTunes folder, and place all your imported media files in the appropriate folders, select “Reorganize files.”