iPlay2 is a free tool for Windows that lets user change multiple iTunes libraries. By default iTunes has one library, but you can create a new library using this app and then transfer all library files to the new one.
Under “Files To Move” you will find those files that are used by iTunes. Those that are grayed out are compulsory files and cant be moved, but others can be moved freely. To create a new library, hit Add Library button. Once you have named it and added it to the list, click Make Library Active to activate it. Now when you will visit iTunes, it will use the new library.
So how does it work? This program only copies the iTunes files from the ‘Home’ folders to the iTunes folder and vice versa. The developer explains it in further details:
Here the two ‘home’ folders are ‘CarPod’ and ‘Sybren’ (I have two iPods) and the iTunes folder which is used by iTunes is ‘iTunes’.
When the library CarPod is made active, iPlay2 first copies the iTunes library files (i.e. originally the ‘Sybren’ files) to its ‘home’ folder (actually saving them if the option ‘Overwrite’ is checked), and then copies the files from ‘CarPod’ to the ‘iTunes’ folder.
The important thing to note here is that this app only copies the files, not move them. So there is always a backup copy in case you mess up the library.
It works on Windows XP, Windows Vista, and Windows 7. Enjoy!