MediaMonkey doesn't auto-delete duplicates as that would be really dangerous (it wouldn't know which copy to keep/which to delete, thus might keep a copy with artifacts and delete a copy that is perfect).
1) You can use Tools > Auto-Organize Files and setup a mask that will result in duplicates having the same folder/filename. This will overwrite them and you end up with one copy. Use at your own risk as there is no way to recover from this.
2) http://www.mediamonkey.com/support/inde ... icleid=113