Enable 'File System' in the Manage Repostitories screen.
That should create a 'repository' folder in moodledata folder.
One has to create (manually, from the operating system), folders in moodledata/repository/ and set their permissions for the apache user/group to see/use them.
Once the folder is there, go to a course where you'd like to use a File System repo and click on the Repositories link in the Course Admin menu.
You won't see any listed until you create a 'File System instance'.
In the next screen that appears, the folders you manually created and set permissions to in moodledata/repository/ should show in the drop down pick list. Give the repo in that course a 'name' and click save.
Now you can use that repository in that course. However, one cannot upload into that repository in the Moodle interface. One can use SCP/SFTP to get files uploaded.
Might want to review:
It's a totally different file system that what one *had* grown accustomed to with all previous versions of Moodle - ie, it's 'not Kansas' any more! :|
'spirit of sharing', Ken