Pretend public libraries were not crushed budgetarily like everyone else, and we're in a world where you can think of cool things libraries could do if they just imagined it.
Libraries should build on small auditoriums, with a nice stage. The main use for these will be Reader's Theater presentations for all ages. These productions can be done by library staff and/or community volunteers, including groups from local schools. See the Author's Reader's Theater site for an idea of what Reader's Theater can be.
The library can also work cooperatively with local schools to host student monologues, skits and one act plays.
When not in use for theatrical productions, these small auditoriums will be a nice place for storytimes and puppet shows.
I would also suggest that these can be rented out to local community organizations and businesses to provide a steady ongoing income for the library.
Dreamily Yours, Librarian D.O.A.