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Once the Library ITL has been deleted, restart iTunes. The application will open with a blank library; custom playlists, music and other items will be gone. To recover the data do the following:
iTunes may display a dialog if any files cannot be located during the import process. The dialog can occur as a result of improper changes to the Library XML, or because the Library XML already contained references to files previously moved or renamed.
Once the updated playlist is imported into iTunes lost songs and other media should be restored though there will be some duplicate playlists. Before deleting the extra playlists confirm the changes are working as expected. Once satisfied, delete the duplicates in the Library and enjoy your hard work. You’ve earned it.
If something goes wrong during the process, or if the results are not as expected, the original Library can be restored from the backup files created. To do so, close iTunes and copy the backup Library ITL and XML back to their original locations (overwrite existing files, if prompted) and restart iTunes to restore the previous Library.
Apple Support KB Article HT1451: How to re-create your iTunes library