Another long description in store here...
iTunes has two main elements. One is the library.itl database file. When you open iTunes it is this that you see. It contains what music is in a library, playlists, date added, playcount, etc. It is this that is really the library. The other element are the media files. When you tell iTunes to play a track it checks in its library file which music file is associated with that track and goes and plays it.
Now you say, "for Users 2, 3 and 4 to have access to User 1s library just as User 1 does." Do you really want User 4 to be able to go and delete or rename tracks, or change the playlists? This can be done if you really want it. Or do you want each person to keep their own library [file] and share media? Even that has disadvantages as a person might still be able to rename a file or even delete it for all. At least everybody would have their own playlists, ratings, etc, though a person could delete a file and then it would appear as a broken link for others. To be honest, iTunes isn't great for sharing.
What are the iTunes library files? - http://support.apple.com/kb/HT1660
More on iTunes library files and what they do - http://en.wikipedia.org/wiki/ITunes#Media_management
What are all those iTunes files? - http://www.macworld.com/article/139974/2009/04/itunes_files.html
Exactly what you want to do will involve different setups so before going into detailed insructions it would help to know which ones to provide. Here's an sampling:
iTunes: How to share music between different accounts on a single computer - http://support.apple.com/kb/HT1203 - relocating iTunes' media folder to a shared area but leaving separate library files - extra tip at https://discussions.apple.com/message/17331189
Chris CA's instructions on sharing one iTunes music library between multiple user accounts - https://discussions.apple.com/message/8974074 - Multiple users using a single library file - similar post at: https://discussions.apple.com/thread/3753008
iTunes Home Sharing now works between users on same computer - https://discussions.apple.com/thread/3865597 The problem with HS is I think you then end up with multiple copies of files, one for each user. At least they cannot damage another's collection though.