I believe that the way iTunes works when you let it find stuff is that it makes a copy of the file in the iTunes dB, if the music you want iTunes to find is already in the iTunes folder I think it still makes a copy leaving the 'original' where it is, hence the duplicates.
What DezB suggests will probably have the same effect, what I would be tempted to try is to copy your music across to another folder, not named iTunes and clear out the existing iTunes dB before letting iTunes find the music on your drive. It should then copy it into the iTunes folder leaving the original where it is.
hopefully that should solve your problem.