I recently became more familiar with RSS feeds, even though I have them on my iGoogle homepage. One thing I realized when doing the exercise of placing RSS tags on my Blogline page, was the difficulty of locating websites that are RSS enabled. I'm still researching ways to find them right now. One thing that surprised me is that I ended up with several RSS feeds that I hadn't selected or added.
As far as being useful for libraries, I don't know how many library related feeds there are - my guess is not many, but the technology is still relatively young. I see it a lot more helpful for people who need to keep up with current news or sports or business information.
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