Can I delete itunes folders after backing them up on a portable hardrive?

I'm trying to conserve space on my computer. If I delete folders, will it disrupt itunes? My music is already backed up, do the actual music files need to be on my computer though? What about my applications folder?
How will this effect me syncing my iphone?

Follow this steps:
1. Open the iTunes application, click "File," then on the drop-down menu, click "Exit" to make sure the iTunes application is not running in the background.
2. Locate and open your iTunes folder. If you're a Mac or Windows 7/Windows Vista user, look in "/Users/username/Music" or "My Music," depending on your program. With Windows XP, look in "\Documents and Settings\username\My Documents\My Music\." Right click on the "iTunes Music" folder, move your cursor so it highlights "copy" and left click.
3. Connect your external hard drive with a USB cable plugged into one of your computer's USB ports. Locate and open the drive on "My Computer" and paste the folder "iTunes Music" onto the hard drive. This may take a long time, depending on the size of your iTunes library and the speed of your hard drive. An average speed will copy about 1, 000 songs every three to six minutes.
4. Open iTunes, click "Edit," then "Preferences," "Advanced," "Change," then select the "iTunes Music" folder you moved to the external hard drive. This redirects the program to the new location of the songs in your iTunes library.
5. Delete the "iTunes Music" folder from your local hard drive, unless you're using the external hard drive for a backup. Locate the folder again as you did in step 2. Right click once on the "iTunes Music" folder to select it, then hit the "delete" button on your keyboard. This will free up space on your local hard drive and won't affect your music library as you're now running off the folder on your external hard drive.