An asset library is a compiled SWF movie with all of its internal graphics, animation, and sound configured in a way that is accessible by the Lassie engine so that the symbols in the SWF's library can extracted and used by Lassie. So, think of a library SWF as just a box of assets (images, sounds, etc). Lassie will never show off the box its self, it will just extract its contents and use them to render a game. Since an asset library SWF is never directly displayed, it needs nothing on its timeline save for a list of what library symbols are available to be extracted from it.
Flash (AS2) previously restricted access to SWF libraries, making true dynamic library sharing impossible. Because of this, previous Lassie builds forced every media element to load in as an individual SWF movie. Even when multiple objects in a scene used the same SWF file, each object would have to load the media separately. This was especially burdensome for large SWF assets like a game's character movie, which would have to reload each time a new room was viewed, rather than retaining and reusing the loaded character asset.
AS3 has thankfully made library sharing possible. Now graphics, animation and sound can be compiled into a single SWF movie, loaded once, then all those assets can be extracted and used by Lassie as if they were part of Lassie's own library. So, this allows smarter asset management and easier loading. Where a Lassie room in a previous build of the engine might have needed to make 50 separate file requests to pull all the assets required for a single room, Lassie can now load a single library movie for each room and extract all the room's resources from it. Libraries can also be loaded by the game as a whole, making their resources available to all rooms in the game without any redundant loading.
Do you know how to use/manage MovieClips within your Flash library? If the answer is "no", then you've got some very basic Flash skills to learn before getting into Lassie. If the answer is "yes", then fear not! You'll be creating, editing, and managing MovieClips just like you always do within Flash; the only difference is that you'll need to tag each clip with a unique identifier, called a "class", then list those identifiers on the first frame of your movie where Lassie can read them. That's it.
There will be several terms used commonly in this tutorial that you should be familiar with before proceeding. Most are pretty basic Flash terms and concepts.
If you have some advanced experience with Flash, you'll probably notice that some of the steps in this tutorial explain the simplest solution, not the most organized, elegant, or best technique. As such, please feel free to build upon this tutorial's basic concepts if you have the background to do so.
And to help advanced users, there are some notes included in this tutorial that specifically target developers with a broader knowledge of Flash and ActionScript-3. Most advanced-user notes are prefaced by a vocabulary test to identify if the information that follows is appropriate for the reader's skill level. If the vocabulary falls outside the range of your AS3 knowledge, don't worry. Move on and don't trouble yourself with excessive technical details.