I'm having trouble with this same thing. It works on my iBook, but when I put it on my new iMac here's what happenes.
My iTunes library is in Shared\Music -- in the first account I opened iTunes under it worked fine. Then I went to another account on the same computer and went throug the process of changing the library location. Nothing happened. Did it several times. Then clicked File>Add and it added all the files to iTunes in the new account, but didn't add playlists.
Then, I purchased a song in iTunes while logged into the second account, and then went back to the first account to see if it would automatically show up when I started iTunes -- it didn't.
Any ideas?