The default configuration for iTunes (for Windows) is to store BOTH the catalogue iTunes uses and the actual music in
C:\Documents and Settings\User Name\My Documents\My Music\iTunes\
The catalogue is contained in the following files (in the above directory)
iTunes Library.itl
iTunes Music Library.xml
The actual music would then be in a further sub-directory (in the above directory) called
iTunes Music
It is possible to tell iTunes to look for or store music in a DIFFERENT location (in my own case I use E:\Music\iTunes). However the catalogue will ALWAYS still be in the original location (on drive C as above).
Therefore if you have chosen to store your music in a non-standard location you must not only restore the music to that non-standard location but you must also restore the catalogue to the standard location.
Based on your description of your problem, it could be you have restored the iTunes Music folder but not the catalogue.
If you have lost the catalogue then what you need to do is to tell iTunes to add all the music, it will then add them back to the current [empty] catalogue.
See
http://docs.info.apple.com/article.html?artnum=301509
PowerBook G4 Mac OS X (10.4.7)