I do this same thing, only instead of having two separate sets of library information, I just made aliases to "iTunes 4 Music Library" and "iTunes Music Library.xml" on my client machine. That way, when iTunes launches, it is automatically exactly the same as the host without manually updating. Also, I can copy music into my library on either machine and it works fine.

You just can't be running iTunes on these two machines at the same time (it just won't launch on the 2nd computer, nothing bad happens).

Also, since my client is a laptop and I am sometimes not going to be at home on this network, I have an AppleScript program that I click to launch iTunes, that checks to see if it can connect to the host library, and if it can't, it launches a local library.

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