Which should I use? I'd like to use it to model circuits for homework and to possibly reuse parts circuits in other designs.
re: (fair question but now deleted) in comments : HDL Designer is a professional tool for logic design from Mentor Graphics. It has been around for a while, originally under the Renoir name, it's only been HDL Designer for about six or seven years.
It intends to add higher levels of abstraction over VHDL and Verilog designs. From what I have seen of Verilog, it might be useful there, but if you're using VHDL you can write at a higher level of abstraction without it, and using HDL Designer badly can keep your VHDL code stuck in the dark ages...
However, that said :
a Library, like a VHDL library, is for things (types, components, packages, utilities) that you will re-use in different places, either within a single project or common to multiple projects.
A Project is what you would use to structure a single design, e.g. for a single FPGA, the testbench for it, and possibly the board it is on.
One reasonable use of HDL Designer is to create wrappers for substantial VHDL components (CPU, memory, bus interface, FFT processor etc) and to create structural VHDL designs using them, in the form of HDL Designer block diagrams. That way you effectively have compilable documentation...