Whenever I have a library that use across different websites/ applications I\'ve always just added the library\'s project into the same solution and reference it from there.
You could also register your dll in the GAC. The GAC handles all referencing, versioning etc and is secure. Having assigned a strong key which is a pre requisite for dlls sitting in the GAC you have a secure way of accessing Dll's and where you are using a shared server this can be invaluable. Your sites which use this dll have a central port of call for the assembly. The GAC has a whole host of advantages with several articles on MSDN and no doubt hundreds on google dedicated to it.