Why can't iTunes find music mp3 files not stored directly on my desktop?

For some time now, I have had this problem:

I'll use a zipdrive to load some music files onto my computer. Often these files will be several discrete albums, stored in separate folders, each folder with an album name. I'll copy these folders to my desktop. Then I'll open iTunes, then open one of the folders, select all of the files therein, and drag the files to the library. So far, so good -- the files will play.

But once I close the album folder and put it into another folder elsewhere on my computer, iTunes can't find the files. When I try to play a file, an exclamation mark in a gray circle appears next to the track number and an error window tells me that the original file cannot be found -- would I like to locate it?

I can't keep each album folder separately displayed on my desktop; I listen to a lot of music, and I'd run out of room quickly. I'd like to find a workaround whereby I can keep my many, many mp3 music files nested within a single folder, and still have iTunes able to access them.

Thanks in advance for any assistance that comes my way. Cheers -- Yosha