Last first: go to Presets/Materials directory of 5.5 and just create a new directory there. Put the new materials there. Nothing can be done about wasted space in libraries in 5*, but you can very simply export more materials. Select the first material you want to export, press shift and click on the last. All the materials inbetween will also be selected. Export the group. If the materials are not sequentially ordered, just Control-click on the wanted ones and export them. * The deleted presets are not there, Bryce 5 just keeps holding the space where they were. So it means your libraries cannot get smaller, however many materials you delete.

-- erlik