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What do you do if you share an iTunes library?

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I used to be the only one with an iPod in my family.

Now my younger sister has one and we share a computer. So therefore we share a library on iTunes. I don't want all the songs she has, and she doesn't want all the songs I have.

How should we go about this problem?

Before I just did what I wanted and it didn't matter because it was only my library...therefore I only learned about iTunes what I needed to for me.

Do we have to manually manage music and movies? And how do you really do that? I don't really get the concept..

What's the easiest way and detailed instructions would help a ton.

Thanks! =]