Okay, I had to search a while for this today, so I’m going to put this info in the hopes that it answers someone’s question about this more easily than I had it answered for me.
The question is, let’s say you have two albums by the same artist that have the exact same two songs on them. Duplicate songs. How do you get rid of one of them and just use one file on both albums?
The answer? You cannot get rid of one of the songs and use the other one for both albums. You have to keep both songs. That’s it. No ifs, ands, or buts.
And it’s really dumb, in my opinion, and could have easily been taken care of by Apple in the development phase of any of its iPod-family products.