I've been playing around with iTunes 7 multiple librairies function, and I must admit it works as advertised.
I've been looking for a solution that enables me to share a library among multiple Macs, along with its copy protected files (.m4a files), the ability of burning CDs, adding files and synchronising iPods. I never found anything that worked with the 50Gb+ of digital music I own. A server based solution wasn't an option because I didn't want a server running full time at home (my wifi network shuts down at night).
My current solution is a 'music' account on the family iMac that streams to the Airport Express hooked to the music center. The iMac automatically logs in to that account and makes the music available via Front Row. A limitation to that model is that when I wish to add music, edit playlists, add posdcasts, I need to do it throught the music account on the iMac (directly or via ARD). I acquire most of my music through my MBP, ripping it or via the iTS, so it's not ideal.
iTunes' feature of selecting a library at startup along with Apple's new Airport Extreme might be a beginning of a solution. Launch iTunes with the option key depressed - like Photo - and it will prompt you for a library. Point it to a iTunes Library file and Bob's your uncle. The library can be stored locally, on an external drive or a server volume, it works like a charm. Moreover, iTunes remembers that last library loaded (in case your forget to press on option).
Now imagine your library on an external drive hocked to your Airport Extreme. The music account could load it by default when launched. Working on my MBP, I could access my entire library when I'm at home, and carry a subset with me when I'm on the road. The iMac can be offline, the library remains accessible.
The only downside is how do you backup?. The drive needs to be USB, and most affordable USB external drives don't offer RAID 1 security, and thoses that do are big, and noisy. Nevertheless, this solution might fit in my current backup scheme, where the music drive would be backed up through my MBP during its regular backup cycles.
Hmm. Would I be looking for an excuse to upgrade to 802.11n?