A stealth feature that's incredibly useful
There are four really great things about this:
1. It knows what you have
When you're browsing Ravelry patterns, it will tell you if you already have that pattern. This may sound a little silly to some people. But those people don't have a metric shed-load of knitting pattern books. I can tell you that I don't even have that many knitting books, but last year I managed to forget that I had one particular book, and shelled out five bucks to buy a PDF copy of a pattern that I already own.
2. It lets you search what you have
One way in which physical books are broken (as compared to e-books) is the inability to search and index them easily. Now that I have added all of my books and magazines to my Ravelry library, I can use Ravelry's search feature and have it tell me all the sock patterns I have. Or all the patterns I have for DK-weight yarn. Or all the patterns I have by Jared Flood (in all the various magazines where his patterns have appeared).
3. It lets you see what your friends have
Now this is, admittedly, purely theoretical at this point. My friend and I are the only people I know who have actually bothered to add our books and magazines to our library.
But THEORETICALLY, you can go to your friends' libraries and see if they have that pattern that you want. Right now, for example, there's a particular knitting book I would love to borrow. I could (in theory) peruse all my friends' libraries and see if any of them have that book.
4. It lets you trade, swap, and sell books and magazines
For those people who HAVE added their stuff to their library, they can mark it "Will Trade or Sell." Thus, I can search all Ravelry users' libraries and find someone who's willing to trade or sell me that book I'm looking for.
In short, the library feature is pretty darn neat - and the more people use it, the more useful it will become!