How do I do custom key binding in iTunes? How would I assign 


⌘1 to Music (Library item) 
⌘2 to Movies 
⌘3 to Podcasts


Surprisingly enough, these key bindings are not assigned to anything yet, and IMO they would be most convenient ones (see e.g. Mail.app).

I can't see any relevant item in AppleScript dictionary for iTunes…
For each Source/Library item (Music,Movies,Podcasts) you want to open with a shortcut, create a new Applescript as follows

tell application "iTunes"
try
    set view of front browser window to (get some playlist whose special kind is Podcasts)
end try
end tell


replacing "Podcasts" with "Music” or "Movies", and save it with to your ~/Library/iTunes/Scripts folder (if this doesn´t exist, create it!), giving it an unique name (like "show podcasts","show movies").

Next, open "System Preferences">"Keybaord">"Keyboard Shortcuts" and select "Application Shortcuts". Click on the little "plus" button to add a new shortcut with:

Application: iTunes
Menu Title: show podcasts   —this has to be exactly the name you gave your script
Keyboard Shortcut: &lt;press your desired shortcut, eg. "cmd+2"&gt;


Now pressing "cmd+2" (or whichever shortcut you defined) while being in iTunes will open the Podcast library item.