It's only one location (C>Users>My Name>My Documents) and it has always been that.
A library contains 'links' or 'pointers' to folders on your hard disk. Just like an 'index' in a book has pointers to chapters or pages or paragraphs. You can manage libraries to add new entries or delete existing entries. It's just a way to have access to folders in less clicks. Like in a book, if you want to know something about a subject it treats, you can use the index or you can use the table of contents or just start reading on page 1 until you find it on page 387.
https://www.google.com/search?q=windows+7+libraries will tell you all you want to know about the subject.
You can use libraries if you want, but there is no need to. It's just what you find easy.
I would leave it as it is.
My computer (Windows 7 Ultimate, 64 bit, MS Office 2010) has just been upgraded, which entailed a full deletion and restart from scratch. Important documents were saved on a Seagate Free Agent external drive. Before the reload, Documents were stored on Disk C Libraries>Documents. They are now there again, but in addition they are now also in Disk C>Users>My Name>My Documents. The two sets of documents are complete, and effectively a mirror image of each other, so much so that amending either one in anyway is automatically reflected in the other e.g. deleting or amending a folder from one deletes/amends it immediately in the other.
So I would be very grateful for advice on
(1) Which of the two positions are Documents supposed to be in?
(2) How can I eliminate one of them? At present deleting one of them would delete both at the same time.
There may be other questions I have not thought of. Any advice will be gratefully received.