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If you see another person's name or username in your iTunes, you haven't been hacked and no one has access to your computer or files other than being able to view and stream your music. Another user cannot download your music - it is safe.
The names you see in iTunes under the "Shared Music" icon in the sidebar are people that are on the same subnet (or local network) as you. This is common at colleges and in the workplace through LAN's, among other places. Other people on the network do not have access to your songs or computer in any other way than being able to view and listen to your music. There's no need to panic; again, your computer's security has not been compromised.
If you don't want others to have access to streaming your music, you can go into the iTunes preferences and go to the "Sharing" icon. You can then either 1) uncheck the "Share my music" box, which will allow no one on your subnet to see your music, 2) or check the "Require password" box and enter in a password. If you do the latter, users will be able to see your username in the source window under "Shared Music", but cannot view or stream your music without your password.
Additionally, if you wish not to see shared music on your network, you can uncheck the "Look for Shared Music" box and no shared music will appear in iTunes again until you decide to check that box.
If you would like to turn on music sharing but do not see other music in your source list, it's possible that no one on your subnet is using iTunes, has iTunes music sharing on, or your firewall may be blocking port TCP 3689.
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