I recently visited library.nu and found a totally different site. No log-ins, and new positioning as "the book review encyclopaedia". The old ability to post links to books is gone-- and so if you've been using it as a virtual library, you'll need a new source of books. There are still other websites for books-- the Russians and the Chinese will have something to replace library.nu (and its predecessor, gigapedia).
Of course, there's still ebookee.org, but the searching for books there is a lot messier than it was in library.nu. Also, many of the links in ebookee don't work; old websites that allowed file-sharing, such as filesonic, have lost their old functionality. I suspect that it's one of the aftershocks of the Megaupload takedown. I thought that the resurrection of library.nu was gonna last. Ah well: Sic transit gloria mundi.
postrcript: (February 15, 2012) I can't log in anymore even when I go to gigapedia.info, and based on the comments to this blog entry, nobody seems to be able to get in. For now, I'll use an alternative ebook search tool: http://gen.lib.rus.ec/ . It seems to be a decent alternative to ebookee. I will, however, miss library.nu's user-friendly interface.
(As of February 17, 2012) Short answer to "What happened to library.nu?" : Legal problems. I found a link from slashdot telling the story of library.nu. After some more searching, I found additional links from the huffington post . I doubt the claims of the plaintiffs here--- that the admins made a profit here. Many of the users are from developing countries and are likely to be students. Also, I think that claims that the admins were selling premium level accounts is doubtful. Many of the people who actually registered on the site would probably have a different story to tell.
(As of March 17, 2012) Even http://gen.lib.rus.ec doesn't seem to work anymore; I keep getting a 404 error message. Still have no news why it's down.
(As of July 8, 2012) There's a article in aljazeera about library.nu, (I got it from library.nu, by the way) and it expresses some of the unhappiness that book-lovers and scholars -- especially in the third world-- feel about the shutdown of library.nu. The library.nu website is still there-- it's morphed into a search site with reviews but no links. If you buy a book from amazon using library.nu, it should help the administrators with their legal troubles. See this link.
(As of March 1, 2013) I url library.nu now redirects to http://www.internationalpublishers.org/, which looks like an organization whose philosophy seems to be diametrically opposite that of gigapedia's and the old library.nu Donors who wish to assist the original owners of the library.nu domain name have no more means to do so; the link I mentioned above is dead.