Blender 3D: Noob to Pro/Using Blender Libraries

You can append libraries in two ways. You can make a local copy of data blocks (like objects, meshes, ...) of the content of a .blend file in your .blend file (appending) or you can use data blocks from another .blend file (dynamic linking).

You can Append with the command in the 3d view File -> Append or SHIFT+F1. When you give this command a file browser window opens. There are two buttons Append and Link at the bottom of the window. The default action is appending. But you can use dynamic linking selecting the link button.

At this point select the .blend file to append. You can select one of the following data blocks type to append:
 * Group
 * Mesh
 * Object
 * Scene
 * Text
 * World
 * (not complete yet)

Note that this is a complete list, when you append only block types present in the file will appear. Select the desired type. Now you can select the particular data block to append by selecting its id.

Indirect linking
When you give an append or link command almost all relations between data blocks in Blender get expanded. For example, when you link (or append) a specific Group, all its objects, the meshes associated with the objects, the materials and the animations will be linked (or appended) too. That is called "indirect linking". When you use dynamic linking such indirect linked data is not stored when you save a .blend file, when you load the file again blender will look for the indirect linked data blocks in the library file.

Groups
When you append a Group, blender will also create links in the current Scene to the objects that are part of the group. The Objects then become visible. However, when you decide to dynamic link a Group, it won't do that. To use the objects in your blender project you can use the group as a duplicator "SHIFT+AKEY -> Group menu -> group id to duplicate".