Well, I found a work-around and even managed to sync my 160 gig iPod! It was as follows:
I changed iTiunes to NOT copy the songs when importing.
I then pointed iTunes to a new empty folder for the default library.
I then added songs from both existing libraries one after another.
So, I got a brand new library, but no playlists or no ratings (which I frankly do not use anyway).
I then painstakingly deleted duplicates (around 3000 duplicates) and then hooked up my...