diff --git a/lib/tailor/GUI/ImageDisplay.rb b/lib/tailor/GUI/ImageDisplay.rb
new file mode 100644
index 0000000..174a9ca
--- /dev/null
+++ b/lib/tailor/GUI/ImageDisplay.rb
@@ -0,0 +1,22 @@
+module Tailor
+  module GUI
+    class ImageDisplay < Wx::Panel
+      def initialize(*args)
+        super(*args)
+        @bitmap = nil
+      end
+
+      def set_image image
+        @bitmap = image.to_bitmap
+        refresh
+      end
+      
+      def on_draw dc
+        dc.set_background Wx::WHITE_BRUSH
+        dc.clear
+        return if @bitmap == nil
+        dc.draw_bitmap(@bitmap, 0, 0, true)
+      end
+    end
+  end
+end
diff --git a/lib/tailor/GUI/LibraryManager.rb b/lib/tailor/GUI/LibraryManager.rb
index 4db5333..2670da5 100644
--- a/lib/tailor/GUI/LibraryManager.rb
+++ b/lib/tailor/GUI/LibraryManager.rb
@@ -3,6 +3,18 @@ require 'Tailor/Collection'
 
 module Tailor
   module GUI
+    class LibraryChangedEvent < Wx::CommandEvent
+      EVT_LIBRARY_CHANGED = Wx::EvtHandler.register_class(self,
+                                                          nil,
+                                                          "evt_library_changed", 
+                                                          1)
+      def initialize(source)
+        super(EVT_LIBRARY_CHANGED)
+        self.id = source.get_id
+      end
+
+    end
+
     class LibraryManager < Wx::Frame
       def initialize(*args)
         super(*args)
@@ -57,6 +69,7 @@ module Tailor
           idx = @tilesetList.append(@tileset.tileset_name)
           @tilesetList.set_selection(idx)
           refresh_image
+          event_handler.process_event(LibraryChangedEvent.new(self))
         end
         refresh
       end
@@ -73,6 +86,7 @@ module Tailor
         else
           @previewPane.hide
         end
+        event_handler.process_event(LibraryChangedEvent.new(self))
       end
 
       def on_ListDoubleClicked(event)
diff --git a/lib/tailor/GUI/MainWindow.rb b/lib/tailor/GUI/MainWindow.rb
index 372acc8..7eef7fe 100644
--- a/lib/tailor/GUI/MainWindow.rb
+++ b/lib/tailor/GUI/MainWindow.rb
@@ -4,6 +4,7 @@ require 'Tailor/Collection'
 require 'Tailor/GUI/TilesetProperties'
 require 'tailor/GUI/TilesetEditor'
 require 'tailor/GUI/LibraryManager'
+require 'tailor/GUI/ImageDisplay'
 
 module Tailor
   module GUI
@@ -56,15 +57,56 @@ module Tailor
         @menuLibrary.enable(@menuLibraryManager.get_id, false)
       end
 
+      def refresh_palette
+        if @palettePanel
+          @mainPanelSizer.detach(@palettePanel)
+          @palettePanel.destroy_children
+          @palettePanel.destroy
+          refresh
+        end
+        @palettePanel = Wx::ScrolledWindow.new(@mainPanel, Wx::ID_ANY)
+        @paletteSizer = Wx::BoxSizer.new(Wx::VERTICAL)
+        @paletteLibraryPanels = {}
+        @collection.library.each do |ts|
+          tsExpandCollapseBtn = Wx::Button.new(@palettePanel, Wx::ID_ANY, ts.tileset_name)
+          tsExpandCollapseBtn.set_min_size(
+                                           Wx::Size.new(256, 
+                                                        tsExpandCollapseBtn.get_size().height
+                                                        )
+                                           )
+          @paletteSizer.add(tsExpandCollapseBtn, 0, flags = Wx::GROW)
+          tpanel = Wx::Panel.new(@palettePanel, Wx::ID_ANY)
+          tgridSizer = Wx::GridSizer.new(cols=2)
+          evt_button(tsExpandCollapseBtn.get_id()) { |event| on_LibExpandCollapseClicked(ts) }
+          ts.tiles.each do |tile|
+            tgridSizer.add(Wx::StaticBitmap.new(tpanel, Wx::ID_ANY, tile['image'].to_bitmap))
+            tgridSizer.add(Wx::StaticText.new(tpanel, Wx::ID_ANY, tile['name']))
+          end
+          tpanel.set_sizer(tgridSizer)
+          @paletteLibraryPanels[ts.tileset_name] = tpanel
+          @paletteSizer.add(tpanel, 0, Wx::EXPAND|Wx::ALL)
+        end
+        @palettePanel.enable_scrolling(false, true)
+        @palettePanel.set_scroll_rate(1, 1)
+        @palettePanel.set_min_size(Wx::Size.new(256, 256))
+        @palettePanel.set_sizer(@paletteSizer)
+        @paletteSizer.set_size_hints(@palettePanel)
+        @mainPanelSizer.add(@palettePanel, 1, Wx::EXPAND|Wx::ALL)
+        @mainPanelSizer.layout
+      end
+
       def refresh_project
         @mainPanel = Wx::Panel.new(self)
         @mainPanelSizer = Wx::BoxSizer.new(Wx::HORIZONTAL)
         @mainPanel.set_sizer(@mainPanelSizer)
         @tilesetProperties = Tailor::GUI::TilesetProperties.new(@mainPanel, Wx::ID_ANY)
         @mainPanelSizer.add(@tilesetProperties)
-        button = Wx::Button.new(@mainPanel, Wx::ID_ANY, "Open Tileset Editor")
+        button = Wx::Button.new(@mainPanel, Wx::ID_ANY, "(Replace with drag and drop target)")
         evt_button(button.get_id()) { |event| on_clickme(event) }
-        @mainPanelSizer.add(button, 0, Wx::EXPAND|Wx::ALL, 2)
+        @mainPanelSizer.add(button, 1, Wx::EXPAND|Wx::ALL)
+
+        refresh_palette
+
         @mainPanelSizer.set_size_hints(@mainPanel)
         @mainPanelSizer.set_size_hints(self)
 
@@ -89,6 +131,17 @@ module Tailor
         end
       end
 
+      def on_LibExpandCollapseClicked(ts)
+        panel = @paletteLibraryPanels[ts.tileset_name]
+        if panel.is_shown
+          panel.show(show = false)
+        else
+          panel.show(show = true)
+        end
+        s = @paletteSizer.get_min_size()
+        @palettePanel.set_virtual_size(s)
+      end
+
       def on_clickme(event)
         puts "I don't do anything"
       end
@@ -98,9 +151,15 @@ module Tailor
       end
 
       def on_library_manager
-        Tailor::GUI::LibraryManager.new(self,
-                                        Wx::ID_ANY, 
-                                        'Tailor :: Library :: Manager').show
+        tlm = Tailor::GUI::LibraryManager.new(self,
+                                              Wx::ID_ANY, 
+                                              'Tailor :: Library :: Manager')
+        tlm.show
+        evt_library_changed(tlm.get_id()) { |event| on_library_changed(event) }
+      end
+
+      def on_library_changed(event)
+        refresh_palette
       end
 
       def on_file_open