What's the solution? Ultimately, despite the best efforts you might have to partition your computer so each person has their own space, iTunes works best when one person, and only one person, is the iTunes overlord. You'll need to use their account to update music, synchronise iPods, play music, and perform any other iTunes task over your collection.
Come on Apple, it's 2010 already. Give us proper support for multiple users on the one machine.