So apple responded.
To move my iTunes "environment" to another computer:
By default, the xml file (and it's binary counter part ending in 'itl') live in \My Music\iTunes. You can using the "Import.." command to import the xml file, and it will create the binary file automatically, restoring all your playlists, etc.
You'll need to have the iPod in "Manual Sync" mode in both iTunes, otherwise you'll continue to get warned that the iPod is linked to another Library. You will *not* be able to copy music off the iPod from within iTunes, so to synchronize your library databases, you'll need to use the "Add To Library..." command, or drag and drop any newly added songs into the other iTunes.
