The geometry folder stays. All your existing characters still use it. On new characters you make in the set-up room, it will place the object in the library folder with the cr2. As far as thumbnail .rsr's go... whenever you open a library, PoserPro will go through and convert any rsr's in that library that don't have PNG's yet... so you can install existing characters just like normal (and just go thru and clean rsr's out every once in a while to conserve drive space).