Alright I just checked it out. The great Library is 350 hammers. An engineer can build it in 1 turn netting you 350 hammers.
A settled Engineer is +3 Hammers per turn. So all bonuses aside it will take a settled GE ~115 turns to even out the number of hammers of rushing this particular wonder. (I realize I am ignore the beakers he makes) Only after that 115 turns will he start contributing above and beyond being used to rush one wonder. So in this comparison you don't actually get a better return on him until much later in the game.
Of course there is a beaker benefit also but I am counting that for less, because rushing a wonder lets you "use" that wonder for 20-35 more turns sooner, as well as buy that city 20-35 more turns of production. So I am willing to call that a wash.
Also as stated before, 3 hammers is like an extra mined hill early in the game, and that is very valuable when you only actually have 4 mined hills. That is like a 25% increase in your total production. However late in the game when you have 40 mined hills, it's a drop in the bucket. Which further supports my points that investing a GE for the hammers. The later in the game it goes the less the hammers he contributes matter, even with bonuses. Getting a rush in the early game is way more important.
Now this is a matter of playstyle, but I feel that doing the right thing NOW is much better than investing in the future (in Civ4 terms). I feel that getting a wonder done sooner, reaping it's rewards longer, and having the city free to build military sooner is a much better investment than letting a settled GE generate 1000

over 300 turns. Not all people think this way. I have a friend who gives all of his warriors city raider even if they are just scouting just in case they will be upgraded to macemen later. I would much rather give them woodsman or medic so they can do a better job scouting now.