Share iTunes library using a blank disk image? Is it possible and safe to share an iTunes library between users on the same Mac using a blank disk image to hold the library?

The goal would be to have all albums in one place only and to be able to handle sync'ing both iPhones to the same library and holding all backups on this image.  Also this simplifies library management and backups (we switch computers every 6-9 months)

What I'd be afraid of are things getting "screwed up"

Also with this solution is it possible to use 2 iTunes accounts?
Why go so far as a disk image? Make a folder both users can access (maybe /Music) and put the iTunes library there.

Using one iTunes library with multiple accounts depends on how you use them. The best way is to have a primary account that is signed in and all purchases happen with that account, then authorize the machine for any other accounts that want to play music/sync apps.