I keep the libraries themselves in a directory tree that is divided by locked, how they were acquired. In each of those trees I organize by developer. So on the disk, and in the files menu it looks something like:
-- NI (stuff that shows up in the library pane, came with Kontakt or add-ons from NI)
---- Factory
---- Session Horns
---- Session Strings
---- etc...
-- 3rd_Party (stuff that shows up in the library pane, developed by others)
---- Kirk Hunter
---- Heaviocity
---- Soniccouture
---- etc...
-- Purchased (libraries I purchased, that need some form of authorization)
---- Project Sam
---- SoundIron
---- Chris Hein
---- etc...
-- Demo (demos from developers that I might end up purchasing the full version)
---- currently empty
-- Free (all the free stuff out there, and that's a lot)
---- Tonehammer
---- 8Dio
---- SoundIron
---- etc
--Imports (stuff I've imported from old GS, EPS, and Akai libraries)
---- GigaStudio
---- EPS
---- S900
Then, in Quick-Load I drag stuff in and arrange it by categories, pretty loose actually.
- Orchestral
-- Strings
-- Winds
-- Horns
-- Percussion
- Choirs
- Sound Design
- Guitars & Basses
- Drums
- Keys
-- Pianos
-- Electric Pianos
-- Synths
-- Organs
- Pop/Jazz Horns
In some cases I need to expand a little bit, for example I'm going to move "synths" up to the first level because it is getting a wee bit crowded.
The database is a really cool feature, but I stopped using it a while ago because (a) the memory footprint was huge, and (b) it was a real pain to assign keywords to older libraries. I've since created a spreadsheet where I can rapidly assign keywords, and a script that I hope will load the database - still working out the kinks, and frankly it isn't a really high priority. And as I've recently built a machine with 32GB of memory I am hopeful that the memory penalty will be much less significant.
The old Kore software did a nice job of finding stuff if you went through the pain and suffering to load it up. ZEN from Big Tick also looks promising, and the Kontrol program from NI could be good too, but I'm not willing to pay for it, and not tempted to upgrade to Komplete 10 yet.
So for now I use my disk organization to find by vendor, and quick-load to find by sound - although I am certain there has to be a better way.