Itunes external storage BASICS 101 HELP

I know this is absolutely elementary--I'm not computer literate as you'll be able to tell. I just got a Lacie external harddrive because my itunes music is taking up too much space on my computer's hard drive. I was told that I can leave the application Itunes on harddrive and use external harddrive for music storage. See? Basic stuff. Thing is, I can't fine a basic instruction sheet for how to do this. Is there a link that covers these 101 questions with instructions? I have an ipod that I'd like to use as well, but I think that is a simpler matter once I get the music stored on the external. I'm sure no one here, with 'advanced' concerns really wants to type it all out. The guy at the store gave me a three second explanation that involved the word: "consolidate." Help?