The only reason i have a different path is because i rebuilt my library a few times to see if i could solve the issue.
"New" (assuming that the issue you see in the location) is just the folder where the library, xml, and media files sit. using spotlight i can only find the one iTunes Library.xml file on my machine.
i am checking with tuneup to see if they can tell me how to find out where the app is looking for the xml file. will keep you posted.
That asside i have compared my XML file with a friends and mine still seems to be missing all the media data. After the line <dict> he has listed all the data, file names albums names etc etc etc. mine contains none of that. so who would itunes create that in his file but not mine!
thanks for the comments so far, but i think i am getting more confused :-)