When I upgrade limewire from 1.7 to the 2.3 version can I transfer my library from 1.7 to 2.3, and if so; how do I do it?

Your complete files will stay, of course, they are probably located somewhere in
c:\program files\limewire\shared

Maybe you have to add the directories to your library again.

Your downloads, however, won't stay, they are lost during upgrade.

No need to move anything. Just go to Tools>Options>Shared and add the folder that your files are in. Just select ADD and it will let you browse for the right folder.

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~Kath~
Always judge a person by the way they treat someone who can be of no possible use to them