Edited to add:
http://support.apple.com/kb/HT1660
Quote:
What are the iTunes library files?
Summary
The iTunes library is a database iTunes uses to organize your music. Two iTunes library files are created and maintained by iTunes for different purposes. They're both in the iTunes folder.
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I would also check for that error on the Apple site, Melody?
https://discussions.apple.com/search...cannot+be+read