Looks like that's gonna be the case. Finder in 10.7 apparently hides $HOME/Library/, so you will have to bust out the terminal to remove b0rken settings.
You can make any folder visible or invisible to Finder. It's just a file attribute:
# SetFile -a V ~/Library
Interesting. You can always
$ open Library
to open it in a Finder window.
Or cmd-shift-G and type ~/Library
Good tip! I use this constantly in File Open dialogs (especially to get into hidden .folders). Also worthy of mention is that you can actually tab-complete paths in the dialog just like in the terminal.