Did you try it according to Apple's instructions? It appears you are asking how to do this but I'm guessing here. Did you actually try this?
Ok my issue is that i am helping a friend upgrade to a new computer. His old computer only had a 40gb HD and he has a 500gb external hooked up to it. Now over the years he has burned cd's into his itunes added files from all over his PC and extrenal harddrive and i'm just not sure how i can go about making sure i copy everything over to his new hard drive and not miss anything. Basically my issue is all the sites i see with how to do it either say that the setting in itunes had to be certain way which friends weren't or if copying to same OS blah blah. Basically i need help copying itunes that has files all over the place from a win xp machine to a win7 machine and organize things better. Thanks in advance and will be checking regularly for questions. I'm more organized and all my stuff is in 1 folder so moving itunes and stuff for me is easy. Just not sure what to do here.