Ok I just wanted to turn my music on and jam out right?

My computer says otherwise. iTunes presented this message to me:
Started with Itunes, Now is the whole system.-ummm-what-happened-jpg

When I got nosey I found this:
Started with Itunes, Now is the whole system.-ummm-what-happened-2-jpg

For a bit of background:

I absolutely hate the library system. I don't want root folders included nor do I want to see their destination.

All I did was add an extender to my 360. and before I knew it even my phone was able to connect to my 360!

No, no, no, not happening!! I want my 360 to see my computer so I can play music, but I do not, I repeat do not want the extender running my life!

P.s. - That videos root folder is only for backups! It shouldn't even be there!

Goals:

Reverse the damage done by the extender.
-and-
Run my itunes folder as a networked folder so it can be seen but not overtaken.