How to use multiple iPods, iPads, or iPhones with one computer - http://support.apple.com/kb/HT1495
Chris CA's 2009 instructions on sharing iTunes music libraries between multiple user accounts - http://discussions.apple.com/message.jspa?messageID=8973804
How to use multiple iPods, iPads, or iPhones with one computer - http://support.apple.com/kb/HT1495 - Method #1 using separate user accounts. Method #2 using separate playlists in one library. Method #3 using multiple iTunes libraries.
iTunes Home Sharing now works between users on same computer - https://discussions.apple.com/thread/3865597
You could set up two completely separate libraries and share music via Home Sharing.
iTunes: How to share music between different accounts on a single computer - http://support.apple.com/kb/HT1203 - relocating iTunes' media folder to a shared area but leaving separate library files - extra tip at https://discussions.apple.com/thread/3664756?answerId=17331189022#17331189022
Also consider getting them their own AppleID, setting each person up with their own user account on the computer, and look into Family Sharing possibilities. Family Sharing - http://support.apple.com/kb/HT201060 - "Family Sharing makes it easy for up to six people in your family to share each other’s iTunes, iBooks, and App Store purchases without sharing accounts. Pay for family purchases with the same credit card and approve kids’ spending right from a parent’s device. And share photos, a family calendar, and more to help keep everyone connected."
If you use multiple AppleIDs on a computer make sure you maintain a backup of all media. There is a 90 day wait time between using different Apple Ids with the iTUnes Store for the purposes of re-downloading past purchases.