Hi robbbby! I'll try to explain what I use it for and maybe that will help.
For me, I have 1 main "server" running as library server. On that server it's library has all of my video, audio and photo collections. Along with that I have my playlists, smartlists, etc. Limited amount, I admit, but I have some. Or me it is nice while at home to know that 1 machine has all tags correct and how I want them, and has my "master" playlists. Connecting via library clients gives me that on any other machine then. It also saves changes, so if I created a new playlist on a client, it places it back on the server, for other machines to have access to later.
Now someone may call me a gumby as I am not sure this is a library server function or not, but a huge thing for me is using it remotely. I listen to my library while at work and to me that just rocks. My lists are all there, my collection is there, and at times I have even pulled up some pictures from my library to show co-workers. Pretty cool really.
So there's my 2 cents....