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iTunes Library Manager makes back up copies of the current iTunes Music Library database file and iTunes Preferences, allowing you to maintain two or more libraries each with its own preferences settings.
For example, you can have one “Main Library” which contains all your songs and playlists, and another which just contains your “Holiday Music” songs and playlists.
Additionally, because each library is saved and loaded with its associated preferences, you can create many different configurations for different uses. For instance, you can assign each library its own designated Music Folder, and keep a directory of audio files on your computer and another distinct directory of audio files on another volume, network drive or external drive; different libraries can have different Sharing, Burning or Importing settings, too. The flexibility is awesome.