Yeah, maybe there's a setting somewhere BUT BE CAREFUL...
DON'T CHECKMARK THE "Keep iTunes Media Folder Organized" BUTTON if you've got folders already set up (and espcially if you have other programs that access your media files) because iTunes will screw with 'em and move your files around. That is, if memory serves me correctly that's what happens. (I like to manually organize my media library... I've got separate folders for MP3s, Apple Lossless, DTS-CDs, and Amazon/iTunes paid MP3 downloads. So I don't use that feature. If I did, it'd put all the music from a particular artist under the same folder regardless of format.)
I'm also not sure what the "Copy files to iTunes Media folder when adding to library" button does, either (under advanced preferences tab). But I don't use that, either. And at this point I'd worry that iTunes would f**k with my stuff if I did.
That said, I must admit that I haven't messed around much with the video aspect of iTunes, so I can't yet say if I'd get duplicates with video. Maybe I'll try that later on today.