The feature is still in limited beta but the service which is going live very soon will allow Steam users to share games with authorized friends and family members just like you would if you had your games on physical discs.
It’s a great feature because your friends can try a game in its full form before buying it. They will also be allowed to rack up achievements towards their Steam profiles.
“Our customers have expressed a desire to share their digital games among friends and family members, just as current retail games, books, DVDs, and other physical media can be shared,” explained Anna Sweet of Valve. “Family Sharing was created in direct response to these user requests.”
How it works is that friends request access to the lender’s library. Once authorized, they can play any Steam downloaded game on their PC, Mac, or Linux based machine. There are some downsides though. For starters, simultaneous usage of an account’s library is not allowed, but the lender may always access and play his games at any time. If he decides to start playing when a friend is borrowing one of his games, the friend will be given a few minutes to either purchase the game or quit playing.
It sounds like a really good feature and can even be a benefit for those playing Single Player games for instance. They could split the cost of the game and play it in rotations (e.g. while the lender goes to work, the borrower can play during the day).