One concept which has generally been applied to copyright practice, even if not copyright law, is that a purchased instance of a copyrighted work provides the purchaser with a transferable right to use one instance of that work at a time. This is often extended to include the case of one person using multiple instances at a time (not applicable to music, but very much applicable to many types of application software).
If you take the CD from the library and transfer some music onto your iPod, then as long as you still have the CD, only one instance of the music thereon (the one on your iPod) will be in use. When you return the CD to the library, however, you are thus allowing someone else to use it. As such, you have no continued right to use it yourself unless you can somehow ensure that nobody else is using it at the time; since you generally cannot be sure of that, you cannot use the music unless or until you check it out again.
It's too bad that there hasn't been any legislative effort to encode the 'instance use' principle into formal statute; I think it would make many things much clearer.
Of course, given that the RIAA wants people to buy separate copies of music for every differnet music-listening medium (if not every player), they'd want nothing to do with such a change.
You both expose the sleeping dragon in your posts: It's too complicated and messy to be "legal." People respond by either becoming tea-totallers or complete drunks, sometimes in protest.
The law, in it's attempt to be "fair" has become so convoluted as to have lost all touch with "fairness" or morality. After all, as one person said, you SHOULD be able to keep people from singing your song in the shower, if you so desire. Of course we think that would be stupid.
In the technological age, many are beginning to believe that keeping people from copying your music, once you've made it available digitally, is the same thing. Is it legal. Nope. But as in my Shower example, everybody will do it anyway.
You have taken nothing from a person unless after your done, they no longer posess it.