SharePoint 2010 document libraries let you store and share files securely, and they also add features that help you manage things like document workflow (the processes that let people edit, comment on, and approve documents) and version histories (what happened to a file, and who did what).
And although file shares give you one path through folders to your document, SharePoint document libraries give you other paths to expose content. You can access documents directly through the browser, you can bubble them up in Web Parts, and you can sort and filter them with their metadata and content types. And with document libraries, you can expose files by their title, not just their filename.
Document libraries give you multiple choices about how the documents get into them, too. You can save a document with the document library’s URL, but you can also e-mail documents to document libraries or drag-and-drop from Windows Explorer. And you can create documents directly in their document libraries.
If you do a search on a file share, you potentially retrieve hits on documents that you don’t have the permissions to open; SharePoint, on the other hand, allows results to be security trimmed so that if you can’t access it, you can’t even see it in your search results.
Everything in SharePoint is a list. A document library is just a special kind of list. Although most other SharePoint lists are organized around things that are defined primarily by their metadata, document libraries are organized around files that exist separately and are described by their metadata.
A document library doesn’t just have to contain Microsoft Word files. Document libraries can contain many file types, including Excel, PDF, and Visio files. Even web pages are stored in document libraries.
Document libraries add the ability to find your documents. Unlike a file share, which treats files as separate objects, document libraries treat documents as content and let you associate certain information (metadata) with the sets of documents in them. This means that documents can be found based on the similarities described by metadata, and not just by the search options you have on a file share.
You might wonder why leaving your documents on a shared network drive isn’t easier than using a document library in SharePoint 2010. The most compelling reason why is that SharePoint offers many ways to organize your documents, such as
Document libraries provide a unique web address for accessing a group of documents. Document libraries make it possible to apply security to groups of related documents, and through security trimming, they prevent unauthorized users from seeing them in search results.
Document properties make it possible to create many views of the same documents.
Folders make it possible to group a subset of documents based on permission requirements.
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Source:http://www.dummies.com/how-to/content/document-libraries-and-sharepoint-2010.html
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