[iTunes] Large Library, Slow iTunes

[Steve]

About a year ago I purchased a huge CD collection at an estate sale  
and recently finished ripping them all into iTunes.  I have  
approximately 55,000 songs (260 G) and iTunes has grown pretty  
sluggish.  Playback, ripping and burning operations are fine, but  
creating playlists, navigating between lists, adding tags, etc  
frequently yields the beach ball for several seconds and occasional  
hangs where I force quit rather than wait it out.  Launch takes a lot  
longer, but I can understand & live w/that.  I would like to improve  
the performance I'm getting if possible.

I'm wondering if anyone has experience managing a large iTunes  
library and if so, can help me out.

My set up: Dual 2.0 G5, 1.5G, 10.4.5, iTunes 6.04 (3).  Most of the  
music (230G) is on an external USB 2 Drive, w/the remainder being on  
my internal drive and all songs are in the same library.

Questions:
1) Would more ram make a difference or is the bottleneck elsewhere?
2) Would putting songs on a Firewire drive improve performance?
3) Would having the music folder/all the songs on the same drive make  
a difference in performance?

Answers and/or any other suggestions are greatly appreciated.

Thanks,
Steve