Moving ITunes Media Folder To Second Internal Drive Fails

I never really used the iTunes media folder system. All my music is on extrenal drive and I was only importing it into iTunes manually to keep my own folder system, for example once a week Ive created a folder with a date of creating and there I had all the releases from that week (some in their own folder or separately but all in this one folder named by a dat eof creation). So on my ext. drive I have lots of these folders by date. And the names of folder always correspond with the date added to iTunes as well..My ext. drive is full now. so Ive decided to take a next step and put out the dvd-rom and put another internal drive (1TB) into my macbook pro which will be used for music and movie data only (the system stays on the old one).What I want to do now is somehow move all these music folder to my new internal drive, so they can be accessed from iTunes without reseting all its features. 

Ive read that one solution can be creating the new iTunes Media folder on that new drive and Consolidate all music from iTunes to this location. Problem is I cant even try it, because when go to iTunes Preferences to change the location of Media folder a hit Create after selectin the new location (new internal drive) after fee seconds the progress freezes and Activity Monitor says that iTunes are not responding. Ive tried to leave it for about half an hour and no changes, even tho theres not much to copy/move cause the Media folder has no music in it, only playlists etc. So question number one is - why its freezing? any other way to trasfer all my collection and keep its organiation as it is without loosing the iTunes list and be able to use it after transfer?

Info:
MacBookPro, Mac OS X (10.6.8)