Not an ideal solution but since I cannot get the internal file picker working within moodle (for webdav) I have done the following:
I have an internal webdav server (in IIS7). The authentication is basic and allows SSL only. Outside of moodle people can log onto this site via the following similar link:
In IE8 they get a basic file listing (since MS decided to remove the webdav support from IE7/8 - the horrors!). If staff want to manipulate the data they can map a drive to the above share.
This all works because ive been doing it for over a year now. However, if I want to link a resource into moodle the staff need to RIGHT CLICK on an item from their webbrowser and copy this link into moodle.
i.e. the moodle link will be a HTML link to
Not ideal but a workaround for the time being. This also allows dynamic linking (as long as the filename isnt changed on the mapped drive of course!)
Internal a person can either navigate the naturally shared drive from "my computer" or they can READ ONLY the file from moodle. Externally they can map a drive at home to the webdav for readwrite - according to their NTFS permissions - (I have a batch file and a VBS to do this automatically for them) or use a READ ONLY link in moodle.