Pardon me. It is "Copy media files to itunes library" just under keep itunes organised.
I didn't realise you still had your stuff still on an external drive.
You'll need to delete your movies from itunes. Keep the files obviously or do it without the hd plugged in.
Change the itunes media file location back to your mbp.
Copy your music folder in the itunes media folder on your external hd to your home music folder - just replace the empty music folder in your mbp's home folder.
Untick the "Copy files to itunes media folder when adding to library"
Add your movie files to itunes. Don't forget to retick the copy files setting.
I should have explained. I have my music files on an external hd. When i rip a cd without the hd plugged in, itunes places the file in the default music folder on the main hd. Itunes will have no trouble finding files in either location and will play them seemlessly. To find out what files i ripped to the wrong hd i need to go to the music folder in my home folder. I hope that makes some sense.