I personally don't use the Lotr's LW Music option for iTunes. However when I enabled it, it shows up immediately in iTunes. But nothing shows in it at present because nothing new has been downloaded since enabling it.

Is it that folder you are referring to which is not displaying content in iTunes? When you click on it, it's an empty folder?

Or is your LW playlist in iTunes showing both your iTunes music files are sharing in LW & the newly downloaded songs?

Don't tell me your LW download folder is your iTunes Music folder right? If yes, then that might be why.

I am confused as to what your problem is.