To create or access a second (or more) library, hold down the Shift key in Windows when launching iTunes. In the resulting dialogue you will get the option to create a new library or navigate to the other Library.
Note: You can only have one Library open at a time and iTunes will default to the last library opened if you don't use the keyboard command to choose one. This can prove tricky when using multiple iPods, if you don't use the keyboard command you can risk syncing to the wrong library:
Using multiple iTunes libraries -Windows
Another option is to create a separate Windows User account for each person on your PC. Different accounts by definition would give you completely separate libraries. Each account has it's own iTunes folder, Library and iTunes Music folder and you load it with CDs etc just as you did with your original one. The iPod can be set to update however the owner chooses, sync all, manual or sync specific playlists
I don't use Windows so I can't give you a step by step on that one, however I can point you to another web page which should help you out. You can read about Windows user accounts here:
Create and customize user accounts in Windows XP
