I get the feeling that the people who were so overly excited about the family sharing plan seemingly had false notions in regards to it.
I will try my best to clear up what I think were the biggest misconceptions were.
Two people cannot play the same game at the same time, unless of course they're playing splitscreen on the same console at once (This was confirmed by Larry Hyrb) So yeah, Person 1 can play Game 1, Person 2 cannot play Game 1, but can play Game 2. There was no "2 people can play one copy of the game at the same time" not multiplayer modes, not single player modes, not anything.
Only two people could use the shared library at once. So even if ten people are on the plan, the other eight can not access the games when 2 people are. So If person one and two are playing from the library, and there are games three through ten in the library as well, persons 3-10 cannot play any of those games while persons one and two are playing.
The sole real advantage to this system was that digital games could be accessed from any place (however they would need to be downloaded entirely, not as great and magical as Microsoft made it sound that it's all up in the cloud where it could be accessed instantly). So let's say if you had a family member on the other side of the country or maybe even on the other side of the world, and you purchased Halo. He could download and play it too (when you weren't playing it) at no extra cost.
It was Microsoft's attempt at trying to crush the physical disc restrictions but it wasn't good enough as with physical games you can lend your games off to as many people as you so choose, you're only limited by how many games you have to give out.
In addition, Microsoft actually never stated that you would be able to sell your digital titles. The retailer trade-in was simply in regards to physical game based purchases only.
