I knew someone would get around to asking that!
This is what I found from the WIKI - perhaps John or someone else from JRiver could weigh in here, but I think if you lost your HD with the JRiver application and associated configuration files (for example these are on your boot drive) you would merely need to re-install your OS, re install JRiver and then Restore this library file and you would be back to where you were pre-crash. This of course does not have the music files themselves.
This is what I read:
The Library contains information about all of your files. It doesn't contain the files themselves.
MC will backup the Library automatically on a regular basis, approximately every two days. The location of the Library backup file is determined by the setting in Tools > Options > File Location > Program Files > Library Backups.
You can back up your library manually if you need to, for example before you make significant changes to the library. Go to File > Library > Back Up Library. You can choose the location at this point. Note: this creates a backup of the currently loaded library. To back up all your libraries, open each one and repeat the process.
Also, remember that the backup will save the Library and all of your settings