Index: app/src/processing/app/Commander.java
===================================================================
--- app/src/processing/app/Commander.java	(revision 6185)
+++ app/src/processing/app/Commander.java	(working copy)
@@ -146,7 +146,10 @@
 
       } else if (arg.startsWith(outputArg)) {
         outputPath = arg.substring(outputArg.length());
-
+      
+      } else if (arg.startsWith(preferencesArg)) {
+        preferencesPath = arg.substring(preferencesArg.length());
+        
       } else {
         complainAndQuit("I don't know anything about " + arg + ".");
       }
@@ -191,6 +194,10 @@
       //Sketch sketch = null;
       boolean success = false;
 
+      // now that we have the sketchbook folder from the preferences file
+      // we may harvest the libraries for the preprocessor to be ready
+      Base.initLibrariesFolder();
+
       try {
         sketch = new Sketch(null, pdePath);
         if (mode == PREPROCESS) {
Index: app/src/processing/app/Base.java
===================================================================
--- app/src/processing/app/Base.java	(revision 6185)
+++ app/src/processing/app/Base.java	(working copy)
@@ -207,8 +207,30 @@
                      "An unknown error occurred while trying to load\n" +
                      "platform-specific code for your machine.", e);
     }
+
   }
 
+  static protected void initLibrariesFolder() {
+    librariesFolder = getContentFile("libraries");
+    // reset the table mapping imports to libraries
+    importToLibraryTable = new HashMap<String, File>();
+    
+    // Add from the "libraries" subfolder in the Processing directory
+    try {
+      addLibraries(librariesFolder);
+    } catch (IOException e) {
+      e.printStackTrace();
+    }
+    // Add libraries found in the sketchbook folder
+    try {
+      File sketchbookLibraries = getSketchbookLibrariesFolder();
+      boolean found = addLibraries(sketchbookLibraries);
+      
+    } catch (IOException e) {
+      e.printStackTrace();
+    }
+    
+  }
 
   static protected void initRequirements() {
     try {
@@ -1053,7 +1075,85 @@
     return ifound;  // actually ignored, but..
   }
 
+  static protected boolean addLibraries(File folder) throws IOException {
+    if (!folder.isDirectory()) return false;
 
+    String list[] = folder.list(new FilenameFilter() {
+      public boolean accept(File dir, String name) {
+        // skip .DS_Store files, .svn folders, etc
+        if (name.charAt(0) == '.') return false;
+        if (name.equals("CVS")) return false;
+        return (new File(dir, name).isDirectory());
+      }
+    });
+    // if a bad folder or something like that, this might come back null
+    if (list == null) return false;
+
+    // alphabetize list, since it's not always alpha order
+    // replaced hella slow bubble sort with this feller for 0093
+    Arrays.sort(list, String.CASE_INSENSITIVE_ORDER);
+
+    boolean ifound = false;
+
+    for (String potentialName : list) {
+      File subfolder = new File(folder, potentialName);
+      File libraryFolder = new File(subfolder, "library");
+      File libraryJar = new File(libraryFolder, potentialName + ".jar");
+      // If a .jar file of the same prefix as the folder exists
+      // inside the 'library' subfolder of the sketch
+      if (libraryJar.exists()) {
+        String sanityCheck = Sketch.sanitizeName(potentialName);
+        if (!sanityCheck.equals(potentialName)) {
+          String mess =
+            "The library \"" + potentialName + "\" cannot be used.\n" +
+            "Library names must contain only basic letters and numbers.\n" +
+            "(ASCII only and no spaces, and it cannot start with a number)";
+          Base.showMessage("Ignoring bad library name", mess);
+          continue;
+        }
+
+        String libraryName = potentialName;
+        File exportFile = new File(libraryFolder, "export.txt");
+//        System.out.println(exportFile.getAbsolutePath());
+        if (exportFile.exists()) {
+          String[] exportLines = PApplet.loadStrings(exportFile);
+          for (String line : exportLines) {
+            String[] pieces = PApplet.trim(PApplet.split(line, '='));
+//            System.out.println(pieces);
+            if (pieces[0].equals("name")) {
+              libraryName = pieces[1].trim();
+            }
+          }
+        }
+
+        // get the path for all .jar files in this code folder
+        String libraryClassPath =
+          Compiler.contentsToClassPath(libraryFolder);
+        // grab all jars and classes from this folder,
+        // and append them to the library classpath
+        librariesClassPath +=
+          File.pathSeparatorChar + libraryClassPath;
+        // need to associate each import with a library folder
+        String packages[] =
+          Compiler.packageListFromClassPath(libraryClassPath);
+        for (String pkg : packages) {
+          importToLibraryTable.put(pkg, libraryFolder);
+        }
+
+        ifound = true;
+
+      } else {  // not a library, but is still a folder, so recurse
+        // needs to be separate var, otherwise would set ifound to false
+        boolean found = addLibraries(subfolder);
+        if (found) {
+          ifound = true;
+        }
+      }
+    }
+    return ifound;
+  }
+
+
   protected boolean addLibraries(JMenu menu, File folder) throws IOException {
     if (!folder.isDirectory()) return false;