I'm a week late with my homework, but better late than never, right?
I've read the recommended articles on Library 2.0, and I think the best description of it as a concept comes from the article "Web 2.0 Where Will It Take Libraries?" published in the OCLC Newsletter: NextSpace.
I liked Dr. Schultz' description of Library 1.0 as a Commodity "Books are commodities, collected, inventoried, categorised and warehoused within libraries. Libraries represent a resource base, contributing to educating the labour force, to supporting innovation processes fueling growth, and to informing the present and the future--whether in the neighborhood, in academia, or in business."
Contrast this with the idea of Library 2.0 which involves disseminating information beyond the limits of the brick-and-mortar library and harnessing user intelligence by offering social services such as tagging, annotating, or commenting.
Wikipedia's article describes one of the many assets of Library 2.0 as the ability for "Library users [...] to craft and modify library provided services".
Thinking about the State Library of North Carolina, I am forced to admit that we are far more Library 1.0 than Library 2.0. This doesn't mean we can't evolve into a 2.0 Library, though. We already possess a lot of the knowledge and enthusiasm in-house necessary to do so. All we need is a little time and effort to shift our focus away from the commodities that we possess, and onto the ways we can distribute and enrich these value-added commodities for our users (both in-house and remotely).