The Red Book Of Westmarch

[Boromir88]

It sounds right but my brain is getting even more mushed. Here, wonder if this will help.

Frodo brought [Bilbo's diary] back to the Shire, together with many loose leaves of notes, and during S.R. 1420-I he nearly filled its pages with his account of the War.

So that talks about Bilbo's diary, and Frodo added his tale in it. Then...

But annexed to it (the diary) and preserved with it (the diary), probably in a single red case, were the three large volumes bound in red leather, that Bilbo gave to him as a parting gift.

The parting gift is Bilbo's three volumes, by saying "annexed" I would assum he took the diary (a combination of Bilbo's, Frodo's, and Sam's tales) and combined it with three volumes which Frodo didn't write anything at all in, left it alone.

This part contradicts my earlier post, but now I see how it works. Bilbo's "section" of the diary is his tale There and Back again/The Hobbit
Snowbird, wow you were right this is a tad confusing, but just a tad .