This all sounds... bearable. I don't really mind the odd copy of a book floating around and it would be impossible to consolidate my library because of the setup I have. Therefore I chose to leave the iTunes checkbox unticked.
There is, however one problem.
Quote:
Set 'Copy files to iTunes Media folder…' is enabled in iTunes Preferences|Advanced to match the setting you chose in iTunes Preferences|Advanced above.
Important: Both checkboxes should be in the same state (checked or unchecked). Mixed settings may lead to an inability for iTunes to sync your books, or multiple local copies.
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This checkbox does not exist in my copy of Calibre 0.8.7 - I'm running Mac OS X 10.6.8, iTunes 10.3.1 (based in the UK since you asked) and the only options I get are "use series as Category" and "Cache covers". The interface is reporting version 1.1.0 of the plugin.
Any ideas? As of the moment, any book I send to itunes points to file://localhost/private/var
If it helps, I store my Calibre library on a different disk to the app.