Does itunes make a copy of downloaded mp3's you put in the library?

No it does not. When you import tracks into iTunes it simply notes the location of file and plays it from that location when you click play. The only exception is when you import a track that iTunes does not directly support like WMA. When you import a WMA, iTunes converts the track to the format determined by your import settings and places it in iTunes music folder. The original file is left in its original location and can be deleted.