Personally I find both very usefull. Libraries are good if your media is spread over multiple folders in different locations, so you can add all the folders into the library for easy access. Also usefull as I browse all my files from explorer navigation pane and they are righ there. You can also share your libraries.
Homegroup is different from normal sharing because you cant use it unless both machines have 7. Easy as to setup when they do. You simply create a homegroup on the first machine, then it gives you a password. The secound machine will notice the homegroup on the network and you simply click connect (porvided you have the homegroup password).
"I already have my files organized in folders (Audio, Documents, Programs...