Phil Harrison, MS Corporate VP:
I can come to your house and I can put the disc into your machine and I can sign in as me and we can play the game. The bits are on your hard drive. At the end of the play session, when I take my disc home - or even if I leave it with you - if you want to continue to play that game [on your profile] then you have to pay for it. The bits are already on your hard drive, so it's just a question of going to our [online] store and buying the game, and then it's instantly available to play. The bits that are on the disc, I can give to anybody else, but if we both want to play it at the same time, we both have to own it. That's no different to how discs operate today. (May 22, Link)
I would be guessing that is the same if they are in the same household, I think the family share thing only works if they on the same console as you but a different account. but 2 separate consoles with 2 separate accounts needs 2 purchased games. However if they playing it on their console on your account thats fine, but if they on your account you cant be.