Strictly speaking, this library does not exist. Well, technically it does - but it was never meant to be public. Well, unfortunately it is de facto public now - for a long while. Why? Because there are several things in XKB which have never got proper network-transparent solution. In particular - dealing with keyboard configuration in terms of rules/models/layouts/variants/options (RMLVO). In the reference X Window System implementation, libxkbfile is handling RMLVO. It was originally designed as internal library linked to X server and several command line utilities like xkbcomp and setxkbmap. It was never network-transparent, it works with local keyboard configuration database files directly - which means it cannot properly support with remote X server (except for special environments using NFS etc).
This is one of many dark corners of X - the library which should not be used by anything but X implementation internally - but it is actually used quite often.
This library is installed as a part of standard Xorg or XFree86 installation.
Commercial implementations of X may be shipped without this library. Or have this library broken. Or have XKB implementation which does not use this library. All these scenarios create a lot of troubles for "bad" (from X Window architecture POV) applications using it. The authors of these applications usually realize this fact - but they have no choice (the only alternative for them is some kind of functional regression).
In the long run, the applications will use new version of XKB protocol which would provide network-transparent solution. But for the "old" servers, they'd have to link to libxkbfile for many years to come.
This library was created in attempt to generalize (and make environment-independent) the code dealing with XKB, from the GNOME keyboard indicator applet. It contains a lot of utility code for accessing the keyboard configuration in terms of RMLVO, tracking the keyboard state etc. Its purpose is to provide a foundation for applications like keyboard layout indicators and monitors, keyboard configurators, layout-aware window managers etc.
Initially the library depended on X Window and libxml2 APIs only. Later (during the GNOME 2.15 release cycle), it was ported to gobject-based architecture.
Currently, it is used in production in GNOME only - but it is also used in ongoing KDE4 development (as optional dependency).
The library uses libxkbfile internally, it also accesses keyboard configuration registry file locally. This makes applications using it "bad citizens" in X Window world (there is standing bug report in GNOME bugzilla). Once new version of XKB is provided, the network transparency is going to be restored (for conformant X servers).
The compatibility with original X Window keyboard handling ("xmodmap") is maintained but with low priority.
The internal GNOME library emerged from two virtual modules in GNOME CVS: libgswitchit and libkbdraw. The merger was performed during 2.17 development cycle, the original modules were immediately declared deprecated. The library contains GNOME code related to the keyboard: keyboard indicator widget (including plugin management), keyboard drawing widget, saving/loading configuration to GConf etc.