This post describes some of the rationale that drove Windows 7 Libraries functionality, and explores the new features and opportunities we, as developers, have with Windows 7 Libraries.
In short “Windows 7 Libraries tries to address the problem of users' content stored all over the PC by allowing users to have full control over their “Documents Library” folder structure. Meaning that in Windows 7, users can define which folders to include in the Documents Library. We can say that Libraries are user-defined collections of content. By including folders in Libraries, the user is telling Windows where his important data is located. The system will index folders, to enable fast searching and stacking based on file properties.”