A shared library allows multiple movies to use the same assets, which means that the user will only have to download them once no matter how many movies they are used in. This is useful with large bitmaps, sounds, fonts and components which can be very large, especially when used in multiple movies.
Lets start by creating our shared library. Create a new Flash document and save it as library.fla somewhere on your hard drive. Now create a new symbol (Insert > New Symbol), call it circle and set the symbol type as movie clip.

[ the Create New Symbol window ]
If your advanced tab isnt open yet, open it by pressing the Advanced button. Now check the Export for runtime sharing check box. Youll notice that the URL field becomes active; this is where you type the path to your shared library. For this example all of our movies will be in the same directory, so just type library.swf. If your shared library is located in another directory, this field must reflect that using the appropriate path.

[ set your Linkage URL value to library.swf ]
Save library.fla again, publish it and close the document. Now create a new document and save it as myMovie.fla in the same directory as library.fla. Now go to File > Import > Open External Library and select library.fla. This will simply open library.flas library. Drag the circle movie clip from the shared library to the library of myMovie.fla. If you right click in the circle symbol in myMovie.flas library and select linkage, youll see that the symbol is being imported for run-time sharing.

[ select Import for runtime sharing and enter library.swf ]
Thats it. The symbol is now being imported from library.swf and will not add to
myMovie.swfs file size. The process is the same for all symbols as well as
bitmaps, sounds and fonts.
The source files for the above example can be found here:

If you modify the symbol in the shared library and republish it, the new symbol will be used in any other movie importing it without republishing the other movies.
All in all, shared libraries are very easy to use and can save a lot of bandwidth as well as reduce downloading times for your viewers.
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