This information would give you information goblins as a example their weaknessess, strengths, battle tactics, places where they live (provinces, habitat etc), weapons they use, where to find them in literature and other such info. It could work based upon when you first find something new you get an codex update simply tellling you the name of the creature and whre you found it, you would gain more knowledge about it the more of them you fight, knowledge could be gained through reading books or talking to NPC's etc. Same with flowers, you would get more updates in codex the more of a paticular species you find, the more potions you make using it, from books, NPC'S. This would apply to everything in the game.
Another cool thing I wopuld like is a large libary where there is just a large encylopedia in game where you can find all this information. There could be some cool quests attached to it regarding missing information and you are sent to try and recover it, that would give the developers a pretty big reason to send you off to do dome wacky stuff! Flamer investigating for example