Before Apple released iTunes Home Sharing in iTunes 9, users could share their music in their iTunes library with other users on their local area network, like in their household or office, but the other users could not import their music. Each user had to keep track of what new music they purchased or music they recently imported into iTunes if they wanted to share it with the other users on their network. This is no longer the case with Home Sharing.
With the older iTunes you could share your iTunes music with other users on the network but these users could not import your music into their library from within iTunes. For another user to import your music you would need to manually copy your music files to a network share they could access. Also they would need to manually keep track of what they imported and what they had not. This is also the reason why users moved their iTunes Media Folder to a network share so other users on the network could import files from their iTunes Media Folder.
Being able to import music into your iTunes Library is important. If you can only view and play another users music it means you cannot not create playlists containing their music, you cannot not sync their music to your iPod or iPhone and you cannot play their music when their Mac is not available on the network. Now that you can import another users music with iTunes Home Sharing this has all changed. With iTunes Home Sharing music is imported directly from one Mac to another and you can get a listing of what music files are in another users iTunes and not in your iTunes, then simply import the files into your iTunes Library.
Enabling iTunes Home Sharing
To enable iTunes Home Sharing you need a single iTunes Account. Type in this same account and it's associated password in the iTunes Home Sharing login of up to five Macs on your network. When you launch iTunes you will then see the full iTunes Library of any of the five Macs under the SHARED title in the left menu.
Manually Importing iTunes Media
You can select any of the iTunes media from the other users and click on the 'Import' button in right bottom corner. This includes paid iPhone applications which you can also share. Even better you can select any of the media lists like music playlists, applications, movies etc. and select from the pull down menu in the left bottom corner 'Show: All items not in my library'. Then simply import the media to your iTunes library. These imported items are now part of your library and can be synced with your iPod or iPhone.
Automatically Importing iTunes Media
iTunes Home Sharing gets even better as you can setup your iTunes to automatically import any new purchased items from the each of the iTunes libraries being shared. Select the 'Settings' button in the bottom right corner and select all the media types you would like to automatically import. I prefer to only import newly purchased music and manually import movies, TV shows, applications etc. The reason is movies and TV shows are large media files and can fill up your hard drive quickly. Also I prefer to download free applications directly from the App Store and select only paid applications from the other shared libraries as I need them.
iTunes Home Sharing has an added benefit in that by allowing shared media to be imported an automatic backup process is in place. If you own an iMac and a MacBook you can have both Macs synced and if either of them ever crashes you have a secondary repository of all your iTunes Media. It is still necessary though to backup your iTunes Library, see a previous post 'Backing Up Your iTunes Library'. With iMacs coming out with 1TB hard drives and with iTunes Home Sharing it almost does not make sense any longer to centralize your iTunes Media folder to an external share drive. Also see the Apple support article 'iTunes 9: Understanding Home Sharing' and ensure you read the full series of icrazee iTunes posts: