It should be the hub of your classroom.  All that you teach and learn should be represented in some textual form in your classroom library.  Research shows that a minimal classroom library has 8 - 10 books per child in the classroom... but an excellent classroom library will have over 1000 books! 
 
These are pictures of Susan's Classroom Library for 2nd and 3rd grade students.  It has both a fiction and non-fiction section.  Students organized the books by topic, author, and genre.