Update CONTRIBUTING.md

Author: DanielRosenwasser

CONTRIBUTING.md

@@ -82,15 +82,22 @@ Your pull request should:
 * To avoid line ending issues, set `autocrlf = input` and `whitespace = cr-at-eol` in your git configuration
 
 ## Contributing `lib.d.ts` fixes
- 
-The library sources are in: [src/lib](https://github.com/Microsoft/TypeScript/tree/master/src/lib)
 
-Library files in `built/local/` are updated by running
-```Shell
+There are three relevant locations to be aware of when it comes to TypeScript's library declaration files:
+
+* `src/lib`: the location of the sources themselves.
+* `lib`: the location of the last-known-good (LKG) versions of the files which are updated periodically.
+* `built/local`: the build output location, including where `src/lib` files will be copied to.
+
+Any changes should be made to [src/lib](https://github.com/Microsoft/TypeScript/tree/master/src/lib). **Most** of these files can be updated by hand, with the exception of any generated files (see below).
+
+Library files in `built/local/` are updated automatically by running the standard build task:
+
+```sh
 jake
 ```
 
-**Note**: The files in `lib/` are used to bootstrap compilation and usually do not need to be updated.
+The files in `lib/` are used to bootstrap compilation and usually **should not** be updated unless publishing a new version or updating the LKG.
 
 ### Modifying generated library files