Home sharing is definitely one way to go about it, but I'm not sure if you can set it up on a remote disk like the OP wants.
You can. My iTunes library is on an external hard drive that also houses
my Time Machine backup. That's connected to an old 12" PowerBook that acts as a file server. All of it works over my network.
Move your iTunes library to the TC (I'd assume you'd have to partition it) and point both Mac's iTunes to that library. The advantage of this over sharing or home sharing is that both Macs can manage the library.
From what I understand, you cannot partition the built-in hard drive of the TC (easily, anyway; you can fudge it using a disk image, but depending on the size of the image, that might be a pain). However, this won't be a problem to the OP.
To the OP, here's one suggested route to setting this up:
1. Open iTunes while holding down the alt/option key. A window will pop up with three choices.
2. From the window, select "Create Library..." and navigate to your remote disc.
3. After step 2, your first mac will automatically connect to this library.
4. To connect the second mac to the library, open itunes on that computer while holding down the alt/option key.
5. This time, select "Choose Library..." and navigate to the library you created in step #2.
And viola, one library on a remote disk feeding two macs. All you'll need to do is move your media into your library, assuming you already have media to move into it. You can either do this using the import feature of itunes, or a manual copy with finder. I'd suggest just using the iTunes import feature, since it's easier and takes no more time than manually copying your content to the new drive.
