Does this retain the ability to use the super cool game library browser thing?
Yes and no. You could re-enable it by editing main2.js, and even add a switch to options to allow choosing whatever method of browsing you prefer by editing optionsScreen.js, but in practise it wouldn't be of much use since after burning your disc you'd end up with files that are either numbered for the original SE browser (and thus you'd have no idea which game is what when browsing with the plain file browser), or a list of games named "My Game (JUE) [!]" for the file browser that isn't indexed for the SE library.
See Scherzo's post here: viewtopic.php?p=998285#p998285
One idea behind releasing this mod was to provide an easy way to use SE without the library but the file browser instead.
If you'd prefer to use the original SE library browser, you could either revert line number 15 in main2.js to g_settings.romBrowseMode = 'SE'; or just copy+paste the GUI artworks from /graphics/ to your original SE installation - both of which should give you the same result.
Haven't tested this though, so let me know if it works the way it should, or if something's looking out of place.EDIT:
Personally I would prefer being able to use both, the library and a file browser, but that would only be possible if we can remove the library's database dependance, and index/link the games with the screenshots/nsfs/codes/etc. by name and not by numbers.