From a check of my copy of iTunes (ver 7.0.2.16, would be higher but later ones don't install on Windows 2000), there is an option that might be causing this:
Go to the Preferences dialog - I get to this from Edit > Preferences, the Mac instructions may vary.
Choose the Advanced Tab, and then the General sub-tab below that.
There should be an option near the top called "Copy files to iTunes Music folder when adding to library". It sounds like you have that one ticked (and that your iTunes music folder is inside your general music folder) - untick it.
iTunes should hopefully, at this point, sort out its contents because you don't need them. If you don't, there should be a box above that option saying where your iTunes music folder is - clicking Reset next to that may sort this out, by briefly giving you no iTunes Music folder. (Proviso: I have not tried this.)
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Go to the Preferences dialog - I get to this from Edit > Preferences, the Mac instructions may vary.
Choose the Advanced Tab, and then the General sub-tab below that.
There should be an option near the top called "Copy files to iTunes Music folder when adding to library". It sounds like you have that one ticked (and that your iTunes music folder is inside your general music folder) - untick it.
iTunes should hopefully, at this point, sort out its contents because you don't need them. If you don't, there should be a box above that option saying where your iTunes music folder is - clicking Reset next to that may sort this out, by briefly giving you no iTunes Music folder. (Proviso: I have not tried this.)
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