Q: How can I merge two iTunes folder, one with music and the other without?

It seems you have ended up with two iTunes libraries.  A library is actually a series of files and folders acting together:

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

I am presuming each location has a full set of files as outlined in the above links? In particular, check the last modification dates on the library.itl files you should find in each iTunes folder which should indicate which one you are really using.

You say:

/itunes/itunes media/ music

but it is important to note what comes before all that.  An iTunes folder in any location will have that as part of the path, but what you need to know is where that iTunes folder is located.

Do not change that setting in preferences.  It will not merge your music.  What I am hoping is that in reality you are only using one of those two libraries and the other can be deleted.  If you really have ended up with two copies that are semi-active then the media from one will have to be added to the other and you'll have a fun day spending sorting out duplicates. There isn't really and easy way to merge libraries.

Another possibility is you don't have to complete libraries but that your media are scattered about.  What are the preference settings for "copy to library" and "organize library"?

Oh boy, this sounds like a complicated one.  Not only does it sound like you could have several iTunes folders but it also sounds like you have folders from mixed generations of iTunes.  About that, read:

iTunes 9 [and later]: Understanding iTunes Media Organization - http://support.apple.com/kb/ht3847

Image of iTunes folder structure Dec. 2011 - https://discussions.apple.com/message/16923545
see also:
Image of folder structure and explanation of different iTunes versions (turingtest2 post) - https://discussions.apple.com/message/13025536 and https://discussions.apple.com/message/17457605

It is unusual to have an iTunes folder at the root level of the hard drive.  I don't know which xxxxx at the store told you to do that.  Usually if you're having issues trying to share music they tell you to put it into a special shared folder which is why I wasn't expecting just /itunes...

Can you make a backup of your computer at this stage in case undesirable things happen?

Is there indication from modification dates which copy of the library.itl file in the HD or your home directory is the most current?  That will tell you where your collection "should be".

Don't do any of this yet, but I think it will be a good idea to consolidate your library so all the files are neatly organized in a predictible location.  You will also need to ensure there are no stragglers in those older style folders (new iTunes puts kind sub-folders in a master Media folder).  This may result in duplicates so you need to be prepared for that.  Either that or risk deleting files that are not being tracked properly.

Rule #1: If you want iTunes to keep track of things being moved about you have to let iTunes do the moving.  iTunes has extremely limited tolerance of you dragging files about unless you do it under controlled conditions or you have told iTunes to no longer manage your media.

Rule #2: iTunes will only work with files you have added to it.  With Finder you can place a file in the itunes media folder and it will not know it is there.  It doesn't search through folders looking for orphans (there are scripts for doing that though).

Rule #3: iTunes is stupid.  If you have two copies of the same file and add them both, it doesn't know they are the same.  It will add them both and, presto, duplicates! There can even be special scenarios where you add the same file twice and it can't tell you don't have two copies of the same track with identical names.  It will add the file twice.  The latter case is unusual but can happen and can be dangerous when dealing with apparent duplicates that are not.

Some of the solution will depend upon what you want and your patience.  There was a situation yesterday where it was easiest to rebuild the library from scratch.  This results in the loss of playlists (maybe those matter to you -- all mine are smart playlists and are self-regenerating), playcount, date added, and a few other things but it also meant a relatively simple solution.

It seems your Home folder is the active library.  I would consolidate this library to make sure it is all up to date with the new structure:

turingtest2 post on consolidating old and new iTunes library structure into one - https://discussions.apple.com/message/18327128

After doing that, browse your Home media folder and your other folders that have media.  Does it seem there is duplication of items or is it just that things are scattered about?  If it looks like everything that is in your library as viewed from inside of iTunes, and you have consolidated, then everything you need/want should now be in your Home > iTunes > iTunes Media folder.  Any others you can delete (this is why I back up first, just in case there are unwanted disappearances).  If it looks like there are things that are not included, you can play it safe and drag other folders with media to the Automatically Add To iTunes folder in your Home iTunes folder.  My only concern is you might end up with duplicates so it will be your call as to which course to take.  You can always deal with duplicates later, but if you have a 400,000 item iTunes library this might be onerous.

How do I know which library I am consolidating? When I open itunes, i think it points to the one at the root level since this is where the music files seem to be and it's the one listed in the advanced tab of preferences.

 

I was checking into this.  I think the only way is to guarantee it is using the desired library by starting iTunes with the option key held down and making sure you select the correct library.  Your iTunes media folder can potentially be located anywhere where you tell it to be, including in the root directory, but that doesn't mean you have to be using the library file at that location.

If I am correct, itunes should copy all the music files as well as books, movies, etc.. folders in the itunes media folder from the root level to the username>music>itunes folder

 

so then I would consolidate library> organize library and check off consolidate and reorganize files in folder "Music"

Yes, relocate your media back to the default locaion (I think there's a reset button for that).  iTunes will move items to the location you desifnate, keeping track of them in the process which is why you do it this way and not with Finder.  Hopefully pretty much everything will then be inside a Media folder inside the iTunes folder in your Home.  After that is done you can start analyzing and adding stragglers such as what is in the music folder in your iTunes folder (vs. iTunes/iTunes Media/Music).