It will replace the default one and launch when the Library soft button on the eBook tab is tapped and it will allow you to access the eBooks in your Library but also to Import eBooks already on your Device to the Sense tab.
As opposed to the original Sense eBook Library which will only recognise the .epub format, this new custom Library Manager can access the eBooks in the other formats as well, if your Device is equipped with a proper reading app for that specific format.
Some technical details (quote):
If an image file is located in a folder that contains an e-book, the application will automatically assume that the image represents the bookcover.
If an .opf file is located in the folder (which is a standard format for saving metadata with e-books), the application will automatically get the title, the name of the author and the name of the publisher of the e-book from that .opf file.
(Source: XDA Developers)