I upgraded my laptop & desktop to MC11 yesterday and my experience with each was slightly different.
On the Desktop, I let MC11 uninstall MC10 first, and here the upgrade process did not pick up the existing MC10 library at all. Fortunately, I had a backup of the library and was able to copy that to the right place and restore from that and after a bit of cleanup (broken links showing up similar to what meep reported) I was back in business.
On the laptop, I did a coresident install, and here the library WAS imported correctly. In fact, this approach worked better because I was also able to copy over some of my other config files (skins, trackinfo, visualizations etc) from the MC10 folder to the new one, and then eventually uninstall MC10 once I had everything in MC11 working.
Not sure if the above behavior is "as designed" but it seems like doing a coresident install first and make sure everything's working ok before uninstalling MC10 (or whatever version you're upgrading from) may be way to go.
Also, I wish that the library would be imported correctly when the user choses to uninstall MC10 first during the install process of MC11.