We have been using Moodle since September and this is going to be our first end-of-term cleanup. We used the assignment activity in most of our courses with both students' files and teachers' feedback files. The filedir folder is 1.5 GB at the moment and I thought that course reset would result in reducing the size of the filedir.
We use Moodle 2.3 on the production server but course reset does not work properly in this version as students are enrolled using the Flat file method and it seems that you cannot unenrol them.
So I set up a test moodle, replicated the production site (database, moodledata) and updated this test site to Moodle 2.5 - you can unenrol Flat file enrolled users in this version.
During the course reset in 2.5 I ticked all checkboxes including "Delete all submissions" for the assignment activity, unenrolling students, deleting grades, etc.). It seems that none of the files were deleted from the filedir after course reset. These files are not available from the course but I have exactly the same number of files in my filedir folder as before the reset action. I also tried to completely delete another course from our test site - this resulted in files removed from the filedir and moved to the trash folder. (I also tried to check the number of records in the mdl_files table: course reset did not delete any records from this table but when I completely deleted a course, all related files were deleted from this table.)
Please let me know how you manage with course reset as I would not like to set up a new moodle instance every year and restore each course there (but I do not want to store all assignment files on my production server for good).