Yes, this is possible. What you have to do is locate your iTunes Library database file (.xml), most likely under ~user/music/iTunes, and replace all of the entries in it that point to your current hard drive location (ie. ~user/music/iTunes/iTunes Music), and replace it with the new location (ie. MyBook/music/iTunes Library).
You can do this using a text edit program with a find and replace function, or copy and paste the content of the database file into Word and use the find and replace function there. Copy and paste it back in, and boom. Make sure to make a backup of the original...just in case.
From there, you create a new iTunes folder on your external, dump over all of your music to your new drive (just as your previous iTunes playlist was), drop the xml file, and if all goes well, your library will be moved, and even your playcount, ratings and album art will be maintained.
This is the way I did it a couple of years ago with an older version of iTunes, however Apple has a
tutorial on their website regarding library changes that may be a bit easier.
