Intro
In Windows 7 you have some special folders for documents, pictures and music etc called Libraries.
If you are not aware of them, basic
I have just found in Marco Cantu's source code repository for his Mastering Delphi books, an example for Delphi 2010 which shows a way of getting the locations inside a library.
The link to the repository is here: http://code.marcocantu.com/p/marcodelphibooks/source/tree/HEAD/
In the delphi2010handbook, chapter 05 (Win7Libraries) is the example source.
The method used in that demo is basically the use of the Windows API that has already been mentioned, the demo confirms that the Library files are indeed of XML format.
Additionally I found the following information which is quite useful: