From what I have heard, it sounds like you just add people to your family list and they can download any of your games at any time. They can then play them when you are not, unless they are that special friend, then they can play with you.
The added convenience of this type of sharing outweighs any potential "cluster f**k" that might occur if all you do is mooch games of your friends; at least, in my opinion.
I think this could be a game changer for me. I've never really been a "used game guy". I sold my first game at gamestop a year ago and that's really the only games I sold. I keep what I buy. I think I'm going to love this feature. I can buy games and, when I'm done, let my brother or sister use them. This feature gets me excited about my pre-order