I use Calibre as my library and to some extent my reading management.
I use tags (for genre and sub-genre) and custom columns to include whether the books are read/unread, page and word counts, labelling when I'm intending to read a book for planning, whether I paid for the book or got it for free.
Additionally, I use it to move books and cover images to my Kindle and manage the Kindle content as well (I sometimes remove books from my Kindle through the Calibre interface).
The other day, I wanted to look at all the zombie books that I'd downloaded as freebies because I was getting birthday gift ideas for a friend of mine. I know he likes zombies and he's unlikely to have trawled the internet for indie offerings. A simple click on the tag for zombies and there I have it. The books pop up and I can start purchasing.
Obviously, I use Calibre for conversion as well. All my books are stored in mobi and epub so I'm as future-proofed as I can be. My library is in Dropbox so that I can access books from the back-end of the library from work as well as home and even from my Kindle/Blackberry.
I also use Calibre to store the books that I make up for my own benefit from web resources and my own work - pasting recipes into Sigil, lyrics for songs I'm working on, crochet patterns. I also use the supplied reader as a quick check on what I've been working on in Sigil.
I have multiple libraries: Fiction, Non-Fiction, Libraries where I keep copies of books that I've bought for other people (so I can keep repurchasing the same book for the same person). I even have a specific Delphi Classics library as I'm slowly deconstructing what I've purchased there to store individually in my fiction library.
The Kindle is my patron saint of reading, but Calibre is my saviour.
