hmmm - I must admit that I am a bit concerned about this issue as well. I have the box edition of Poser 7 - but I am shy to admit I am a little concerned about installing it due in fact to this whole library issue. 
While I am a good software user - I am not good at all of the technical aspects of making a computer work - such as the technique described above. I do not have an external hard drive . . nor do I want the expense and complexity of this. 
I have spent a lot of time organizing files in the P6 library (renaming them to remove all of the annoying !!! symbols venders use, etc).  I am, admittingly affraid of feeling like I will start over. 
e-frontier - if you are reading this . . . I would like to request that Poser 8 uses the same library directory . . . . please don't make us recreate all of our work each time we upgrade. Maybe this is not a problem for all the techies out there. . . but for me, it is a real issue. 
I am reading the manual now . . . and will install once I feel comfortable. The manual text for this is not very clear to me about this. Seems like more tech talk . . . Please remember there are users like me who are not skilled or interested in discecting our computer hard drives.
Thanks for starting this thread - it is nice to know others are concerned as well. 
Tim