They are not on your computer.

iTunes listens for other computers who share their iTunes. iPhoto does the same. So, if I want my family to listen to my tunes, or look at my pics, I turn on the sharing. They can't download or delete those files (they're on my machine), but they can listen to/watch them (if they have their machines set to "Look for shared libraries.")

To know more, see Digital Audio Access Protocol - Wikipedia, the free encyclopedia

Cheers