more than one library in itunes

To create or access a second (or more) library, hold down the Option key when launching iTunes 7. In the resulting dialogue you will get the option to create a new library or navigate to the other Library: Using multiple iTunes libraries -Mac

Zevoneer wrote:
create a new library or navigate to the other Library:

Just one quick question: To what depth do you need to navigate? That linked Help document says:

You can name your iTunes library (the folder containing all of your iTunes content and the iTunes Library file) whatever you like and store it anywhere.

So, does this mean that you can stop at the folder level when iTunes asks you to 'choose Library', or do you need to continue right down to the iTunes Library file itself?