I’m currently doing the same thing MiloMilo. I heard there were issues using the My Book Live Duo as an iTunes Server due to changes in recent iTunes software. I think this work around will work.
1.) Move your media to the MBL Duo.
2.) Select all of the video files in the Finder window.
3.) Hold the “Control” key and then drag all the files into your iTunes library.
Explaination: What this does is only send the metadata and path route information to iTunes. Holding the control button disables the files from being copied to your original iTunes Folder structure. Try this with one or two videos and see if it works. You can make sure the Control holding worked by right clicking the file in iTunes and then selecting Get Info and make sure the file path says something likes Volumes\MY-EXTERNAL-DRIVE-WHATEVER-I_NAMED_IT.
Best of luck!