Have songs on my hard drive already, but still has iCloud icon next to it in iTunes...

That would explain what you're seeing.

Two iTunes can't read from the same library files, so iTunes actually stores it's library files in ~/Music/iTunes even if the files are not physically stored on the internal HDD of the computer.

What I suggest, if you want to the MBPr to play only local files is to disable iTunes Match and let the cloud content clear out of the iTunes library. Then go to iTunes Prefs > Advanced and unselect the option to "copy files to the iTunes Media Folder..." You might also want to change the default location of the iTunes Media folder so it points to the Drobo on the wireless network. Click OK once you've done that and you can now use the Add to Library command in the File menu to add the music to the library.

The drawback to this is any music that is added from the other laptop will not be automatically added to the MBPr library and vice versa unless you have auto-download enabled. You also need to have a backup scheme in place for all the music and both laptops.

Possibly a better solution is to use Home Sharing on the home network. Have the iMac be the "master" library and the MBPr be the "slave." The drawback to this is the iMac must be on and iTunes running for the MBPr to be able to see the library. But since it is a desktop I'm guessing you might leave it on all the time anyway, so just leaving iTunes running might not be much of an inconvinence. The advantages to using Home Sharing like this is any new content that is purchased can also be automatically added to the iMac library by enabling the auto-download feature of iTunes.

sadcaper wrote:

With iCloud, is there a need to backup music anymore? If you lose your hard drive, can't you just download it again from iCloud? That was my impression at least.

Read this: FAQ: Why iTunes Match Can Not Be Used as a Backup. If you care about your data you'll still keep local backups of all your personal data. Cloud storage is nice and all that but Apple doesn't market iTunes Match as a backup solution and because the matching is not 100% accurate nor does the service store Apple Lossless files, it is not a viable backup solution. For cloud backups you want a company like Backblaze or Mozy or one of the others available who are backup solutions.

sadcaper wrote:

Currently both MBPr and iMac have the iTunes Media folder pointed to the Drobo. However, I did notice that some music files were downloaded locally on the MBPr, which I think are from the auto download feature. Not sure though.

Yeah, the home sharing thing may work. I wanted for both machines to be able to see purchases from either machine, or iPhones. That's why I wanted them to share a library. So if I bought a song on my laptop, I could run upstairs and see if on the iMac as well. Maybe library sharing is the best way to do that however.

Keep in mind that any purchases made on the MBPr will be downloaded, and with automatic downloads turned on purchases from other devices will also be downloaded. Right off the top of my head I don't know if this will result in duplicate downloads, but as long as the MBPr is on the local network and iTunes has the library pointing at the Drobo it will all go into the same spot. BUT... if you make a purchase on the MBPr while away from the local network that purchase will be downloaded to the local internal HDD.

So a variation on the theme I talked about above is to, perhaps, not make any purchases on the MBPr and turn off auto-downloads for purchases and keep iTunes Match and Home Sharing enabled. This will enable you to access the music library while home and away and not keep any media on the internal HDD.

There are two "cloud icons" used by iTunes Match. Both will show in the "iCloud Download" column in the iTunes browser. One is just a cloud icon that is used to indicate the track has not yet been processed by the iTM service. The other is an actual download icon and is a squarish button. Which "cloud" icon do you mean? I'm guessing from your post it is the download button.

If you do mean the download button how did the library get into this state? Did you delete tracks from the library and now need to download them? We will be able to help you better if you can provide more information on how the library got to where it is. Specifically, when you say:

... all of the songs in my iTunes library (connected to airport extreme) says they are in the iCloud instead of local.

What do you mean? Do you mean the library is stored on an external HDD connected to an Airport Extreme via USB? Later in the post you indicate the files might be on the internal HDD of your computer. Please be specific in your descriptions.

To try to answer your questions generally, the default behavior of iTunes with iTM enabled is to play all music from the local files unless you have deleted them from the library. It does not stream by default in iTunes. Nor should any tracks have the cloud download icon next to them unless they have been deleted from the library.

sadcaper wrote:

Thanks for the reply. I'll try to be more clear.

We recently purchased a Macbook Retina and once we did this we decided to activate iTunes Match. So we did. It works great for our phones.

When you purchased this new Mac, and before you activated iTunes Match, how did you get the music files onto the internal HDD? And did you add the music files to the iTunes library? Are you positive the music files are actually on the internal HDD of the MBPr, or are they still on the Drobo?

From the information in your posts I appears that you have not added any of the music to the new library on the MBP, but simply enabled iTunes Match. So what you are seeing is expected.

This additional information is helpful. I'll come back to some suggestions on how to use multiple computers with one music library later.

So... my question is still unanswered. When you purchased the MPBr, did you add the music stored on the Drobo to the iTunes library before you enabled iTunes Match?

You would have pulled down File > Add to Library to add the music.

I have just experienced a similar issue but from a VERY DIFFERENT cause.

I only have one physical computer, and I have downloaded all my music and TV shows onto that HDD (well, two 2TB hard drives in one spanned volume).

Suddenly iTunes has completely scrambled the library, and the download icon is now by all my items, even though they're all on the HDD already, and I did nothing to change iTunes, move the library, etc.

The icons for the same TV series shows up multiple times now, and even mixes TV shows (icon is for one show, text is for a different show). For one season of one show there are a half-dozen entries with random episodes in each.

And the download icon is by them all, so iTunes doesn't recognize that the file already exists (even though it lists BOTH the show already in the library and on the HDD right by the same exact episode on the iCloud).

Please help!

You have posted to the iTunes Match forum, which your question is really not releated to. You'll get better support responses by posting to the appropriate iTunes forum.