For a while now, I've had my iTunes Library on my Time Capsule. There were some frustrations with this at times, but the way I have it setup now is very smooth.
As mentioned, sometimes files would get copied to the local drive instead of the external. This would happen when the Time Capsule was not mounted prior to opening iTunes. iTunes would then create a new iTunes Media folder on the local drive since it thinks its missing. Since you can't expect yourself to constantly remember to mount before opening iTunes, the use of aliases comes in quite handy.
First, you're going to want to leave your iTunes folder on your local drive and ONLY move the iTunes Media folder that is located within it. This ensures that all of your preferences and iTunes information remains intact no matter where or how many times you move your library, "iTunes Media". Be sure to point iTunes to the new location of your iTunes Media folder.
Also, my Time Capsule's hard drive is protected. I was sure to allow my Mac to remember this password in order to connect to it without prompting for a password each time so that iTunes could connect when it needed to.
Next, and this is the important bit, is to create and alias (shortcut) for your iTunes Media folder. Once you've moved your iTunes Media folder to the external drive and pointed iTunes to it, create an alias of the iTunes Media folder in the iTunes folder that's on your local drive. This prevents files from being copied to your local drive accidentally.
Now when I open iTunes without first mounting Time Capsule, iTunes will try to point to the local drive, find the alias, and force the Time Capsule to mount in order to connect to its Media folder.
Note: Even if iTunes does not force the network drive to mount, it will not copy anything to your local drive as long as you have that alias. It simply will not copy anywhere or be able to play your files until you mount the network drive. As soon as your drive is mounted, iTunes will automatically be able to find anything. No re-pointing it, no unwanted local copy.
If you ever decide to move your iTunes Media folder back to your local drive, simply delete the alias in the iTunes folder on your local drive, move your iTunes Media folder there, and point iTunes to the new location. Your iTunes will look exactly the same because you left the other folders in the iTunes folder on your local drive.