If you have all the originals, you can delete all files from iTunes, then delete everything in the medial folder, than re-add all the originals with the checkboxes unchecked.
If your artwork is embedded in the files by you manually adding it, you won't have any artwork in that Album Artwork folder, so you can delete it. If your artwork was downloaded from iTunes and resides in that folder, if you delete it, iTunes can download artwork again, re-creating it.
The fact is, if you already have an organization established for your music, it's better to prevent iTunes from organizing it. For example, my music is organized in folders by Genre, then by Album Artist, then by Album, then by songs in each album. iTunes doesn't use that method, so having iTunes manage my library would screw up my already-organized library. The library size is irrelevant. It's whether or not you want to keep your organization method or let iTunes use its method.well whilst you have nothing in your library, there will be nothing to organise and once you have re-built your library (if thats what your doing) it just keeps your files in you iTunes folder organised, in short, no, you won't mess anything up, but there really is no point in having it unchecked, why would you want to prevent iTunes keeping your files organised when you could well have thousands
