Have you tried creating a new playlist, hooking up your external HD and importing the files?
This may work, i just wouldnt attempt to open/update the playlist with no external HD attached.
This is off the top of my head and without trying it myself. iTunes has an established location for your iTunes Music Library. You have to set or re-set the location of this to your external drive. In iTunes 8 (this is on my Mac), go to Preferences, Advanced, and you’ll see a location set for your iTunes Music folder. Change this to the new location. Then there are a couple of checkboxes below that where you can have it copy songs into that folder when adding them to your library. Right now it seems to be doing that, into your current library location.
After changing your folder location, anything in your main HD’s iTunes music folder, if you want it on the external drive, just play it or otherwise import it to the new location. I think that should work. Beware though, if you launch iTunes with that drive not connected and/or powerd up, it will default to creating a new library on your local HD and you’ll probably have to set it back to the external library next time you hook it up.
For best results, it’s easiest to have your music on your local HD but if you’re on a laptop that may not be possible. If it’s not a laptop, consider a bigger HD, and using the external one to back everything up.
Hey John, thanks for the help, it wasn’t exactly what I wanted but it led me to what I wanted. What I wanted was for it to not copy all those files over, but still put them into my library. In those advanced options there was a check box for just that!