I like what a lot of you are saying.
Ultimately, I think we all agree that books should be a vessel for knowledge in the game, able to pass down information through generations and across cultures. But I also think that books should also be vital for tasks such as record keeping of stockpiles, wages, and government related stuff, as I think that's a big part of why writing came about in the first place. Basically, writing should serve as it does in real life as a technology or tool to help one to "remember" something they otherwise couldn't efficiently, like large amounts of mind-boggling numbers in mathematical operations, data during experimentation, code of laws when administering justice, histories of entire civilizations, etc.
I would use books as a balancer. Low level dwarves wouldn't be able to do everything instantly (as right now even a dwarf with no experience in a skill can do everything in the skill, if shoddily), but books could could be an easy and quick way of boosting a dwarf to, say, level 3 in a skill, where he could now do everything related to that skill. For example, if you put a cow in front of me, I would have no idea how to milk it, but if I looked it up on the internet first, at least I would know how to start.
So, I like this idea as well, but I don't like the idea of books providing a skill boost, or
only a skill boost (which I understand may not be exactly what you are suggesting). What I would like is for books in DF to do what they do in real life (or at least as much as possible) which is present and transfer (through reading) a bit of knowledge to the reader; not just a skill point in, say, soap making, but the knowledge (and through it the ability) to use lye and other ingredients in the right procedure to produce soap, and the ability to disseminate this bit of knowledge to other entities. Without this knowledge the person would be left to figure out the process on his or her own or be shown the process by someone else.
Knowledge transfer would lead to OODLES of emergent-behavior awesome!!!
Also, with regard to record-keeping and books. I think that books should be the medium of storage of such information as stockpile info, wealth, criminal records, and trade agreements, in addition to the other things mentioned and that if they are destroyed or lost, the data should be lost with them. So, for example, if a fire broke out in the library and stockpile records were stored there, one would no longer be able to access accurate stockpile information if the books were burnt up. The same would go for historical documents and the like... Knowledge could be lost in a convincing and realistic manner in this way! Maybe having records written down could also allow the player to monitor trends in production output and the like if a record keeper was told to record such data. I dunno.
I think that would be cool. :3