• get a copy of the current version
• copy LibStub.lua into your library's folder
• set up your <library>.toc file to load LibStub.lua (in case you support stand alone loading of the lib)
• don't load LibStub via the xml file ment for embedded loading of your lib
• don't set LibStub as X-embeded or OptDep

• set up an external pointing to svn://svn.wowace.com/wow/libstub/mainline/tags/1.0

or

• get a copy of the current version
• copy LibStub.lua into your addon's folder or a subfolder of it
• set up your <addon>.toc or embeds.xml file to load LibStub.lua
• don't set LibStub as X-embeded or OptDep

local lib = LibStub:NewLibrary("MyLibrary-1.0", 1)

if not lib then
  return	-- already loaded and no upgrade necessary
end

lib.somearray = lib.somearray or {}

if not lib.frame then
  lib.frame=CreateFrame("Frame")
end


function lib:SomeFunction()
  -- do stuff here
end

function lib:SomeOtherFunction()
  -- do other stuff here
end

local function OnUpdate()
  -- timing stuff here
end

lib.frame:SetScript("OnUpdate", OnUpdate);

local lib = LibStub:NewLibrary("MyLibrary-1.0", "$Revision: 12345$")

Do be aware that moving a library from one repository to another will change revision numbers. Do not ever let it slide backwards. If you are caught in this situation, you might want to use something like:

local lib = LibStub:NewLibrary("MyLibrary-1.0", 
  12345+tonumber(strmatch("%d+","$Revision: 2$")) 
)

This is a convention rather than a function of the specification, but all Ace3 and Rock related libraries use the following semantics for doing embedding / mixing in (specifically, libraries with an .Embed() member can be specified as embeds during addon object creation rather than having to embed them explicitly):

lib.mixinTargets = lib.mixinTargets or {}
local mixins = {"SomeFunction", "SomeOtherFunction" }

function lib:Embed(target)
  for _,name in pairs(mixins) do
    target[name] = lib[name]
  end
  lib.mixinTargets[target] = true
end

... and at the end of the file, we handle library upgrades by simply re-embedding the library in all positions where it has previously been embedded / mixed in:

for target,_ in pairs(mixinTargets) do
  lib:Embed(target)
end