>From the top of my head, Vendor is for third-party vendor libraries which 
you can import and use in your code, but are not designed for use with Cake 
specifically.

Lib is for CakePHP related classes or packages, which follow the Cake 
file-path and naming conventions (for instance if you make your own Logger 
class or Database interface, etc.)

If you are more a hands-on type, here's a good example of Lib vs. Vendor 
use https://github.com/CakeDC/markup_parsers

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