Sorry- I don't quite understand: cohorts is a Moodle 2 thing yet you say you are using Moodle 1.9? Are you perhaps meaning Moodle 2? Only managers and admins can add cohorts to courses.

Ok, I figured it out so I thought I'd pass along the answer in case anyone else ever needs it.

First of all, I was actually using Moodle 2.0.2+ (build 20110420)

Secondly, here are the directions for creating a user role that can create course and create/edit cohort groups at the category level.

REF: http://docs.moodle.org/22/en/Capabilities/enrol/cohort:config - permissions list needed for course cohort management. 
1. Log into Moodle as a site admin 
2. Go to Site administration - Users - Permissions - Define Role 
3. Click the "x2" icon to the right of the "course creator" role in order to make a copy of it 
4. Name the role = "Cohort Manager" 
4. Set role archetype = ARCHETYPE:Course Creator 
5. Set Context types where this role may be assigned = "System" & "Category" 
NOTE: The default permissions for a "course creator" role will be broken down below the "Context types where this role may be assigned" field. You can override the default settings to created a tailored role that has the ability to manage category-based cohort groups. 
6. Set the change default permissions as follows: 
- Role assignments synchronised to course enrolment enrol/category:synchronised = allow 
- Add and remove cohort members moodle/cohort:assign = allow 
- Create, delete and move cohorts moodle/cohort:manage = allow 
- Configure cohort instances enrol/cohort:config = allow 
- Configure manual enrol instances enrol/manual:config = allow 
- Unenrol self from the course enrol/manual:unenrolself = allow (optional) 
- View site-wide cohorts moodle/cohort:view = allow 
- Configure enrol instances in courses moodle/course:enrolconfig = allow