Music storage: Hard drive, Itunes, or both?

I got a laptop earlier this year and have been storing music on the hard drive. I just got a little Ipod a few weeks ago for exercising so I started using Itunes for loading the Ipod and such. Now I have most of my music on the hard drive and on Itunes. Is there any reason for me to have it on both? Should I just dump the music from the hard drive and use Itunes only? I know some folks who do this.