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It means any music outside the iTunes Music folder which is part of your library will be copied into it.

For example, say I had song "X" in a folder called "Y", which was not the iTunes Music folder. Consolidating would mean song "X" would be copied from folder "Y" and into the iTunes Music folder.
 
fantastic, that's what I assumed, but I needed a clear definition to double check. So I'm going to do this on my friend's pc.... I have a macbook, so playing around with her iTunes stuff is a bit confusing. She has approx. 5gigs of music in her iTunes library, but the iTunes music folder only reads a little over 2gigs. Selecting a song at random from her iTunes library and asking it to reveal itself in Windows gave us some crazy folder in which I cannot find on her computer anywhere, but it says it exists. I found a folder that is supposed to lead up to it, but it's like the folder that the selected song is (supposedly) in has a Hide feature. I don't know how to go about fixing this, but I don't want her to have all this space being taken up on her computer with duplicates of songs even though I can consolidate the library and put everything into the iTunes music folder... Any suggestions on how I might locate this hidden folder(s) with the other 3gigs of music?
 
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