I have a similar issue, but my initial problem-solving technique may get you halfway there...
I recently upgraded to Mountain Lion and have now created a separate user account for my wife (so that we may each enjoy full functionality of Mt Lion and iOS6). In her user account, iTunes was a blank slate. So what I did was change my iTunes folder's settings so that it may be shared with her account. Then, I went into her iTunes account and in Preferences-->Advanced set that shared folder as the iTunes Library folder. She now has full access to those songs. Problem is: her account is not able to download purchases due to an error message that says something about her "priviledges". She is an administrator on the Mac so I don't think that's the issue. Also, new purchases I make from my iTunes account do not show up in her folder (basically, the folder is static and does not automatically update).
Again, that may help you get halfway there, but as you can see, this is a work-in-progress for me, too!
@fjosephferrara - you are absolutely right, this is exactly where I am at. The static issue is a real pain, how do you get around this? I note that the Preferences-->Advanced setting does have a check box "Copy files to iTunes Media folder when adding to Library". I have just checked this for the first time, so query whether this will resolve static setting?
First, set up to share music: http://support.apple.com/kb/HT1203
Then, set up permissions: https://discussions.apple.com/thread/3753008
Lastly, put your iTunes library in the same place (with shared permissions) and designate it (option-hold when opening iTunes - method 3 step 10 here: http://support.apple.com/kb/HT1495 )...
On my mac, my wife has a nice music library, while I have no music in my library. So, I simply start iTunes using her account. So, I type:
sudo -u mary /Applications/iTunes.app/Contents/MacOS/iTunes
from a terminal, and I get iTunes running with her account, including her library.
Solved the problem for me....