Ive been doing this a while now and thought I would post it up as its quite a nice little trick. Apologies if its obvious and you guys are already doing this but as there seem to be a number of Steam users on here it might be useful.
So whats it all about? Essentially, utilising the 'Family Sharing' options in Steam its possible to share libraries with up to ten friends to create a single consolidated library of all your collective games. Valve designed this functionality to allow Family members to share libraries on a single computer, but with a few tips, its possible to do this without you all living in the same house.
What are the limitations then? To enable Family sharing you need the person you want to share with to login to their steam account on your PC and then enable sharing in the Family settings by pressing the 'Authorise This Computer' button:
As you can see from this image, I am currently sharing with three other users which then enables their libraries in my account:
To do this without being in the same room, the simplest suggestion is to use a tool that allows screen sharing and remote control such as:
Simply start the meeting and then take it in turns to log in on each others PCs and enable sharing in the settings as above. All going well you will then have access to the entire library (removing any duplicates).
The final restriction is that if a library has been shared with you, you can only use it whilst the library owner is not playing any games. They can be online but not in game.
There is no adverse effect on either of you as the library owner will be able to use his library without impact and if you are in game when the library owner starts playing, you are given a notification and a few minutes to save and close the game.
Using this method I now have access to a library of over 680 games and counting