In version 2 and 3 chart files have a file extension of '.knt2'. User stitch libraries have a file extension of '.smlib'. There are multiple system and user libraries. Chart files reference stitch libraries indirectly through aliases that are stored in Preferences. Using an alias means that chart files and any associated user stitch library can be viewed and edited on different computers and it does not matter that the files may be in different folders.
Each alias uses a combination of the stitch library name and the user namespace. Each combination of name and namespace must be unique. In order to create a user stitch library, a value for the namespace should be stored in Preferences. For more information about namespaces see What's a namespace?.