Not enough detail Susan. Are you planning to have an external reporisitory like Alfresco? Are you going to enable Dropbox etc?
I'd suggest you get a 2.3 install ASAP and put some teachers on it (volenteers of course, hardy souls who can cope with a few fun things and a roller coaster ride) You have got to get your hands dirty sooner or later. The sooner the better.
The change is significant, depending on how you set up 1.9.
I've wondered if really Moodle should say "It doesn't really give you the functionality an insitution needs which is reasonably big and has multiple teachers involved in single courses" You can make it work of course, but it relies on good habits from staff.
Legacy files was brought in very latye in the piece, and I still don't really understand how these work with upgrades, imports etc. See the help. http://docs.moodle.org/23/en/Legacy_course_files
On the other hand, an optimistic view is this: "There are a whole lot of cool things in 2.0-2.3. You have the built in repositories . . . just live with them, and see how it goes". You will need to get your head around the 'link to' option or 'copy from'.
Just some thoughts, and good luck. Others will have some things to say I am sure.