The integration is really good but it assumes you have a SharePoint administrator setting it up.
We do have an administrator, now internal. Originally we were using an outside vendor. Either way, I'm not sure how the administrator could be responsible for the embarrassing kludge that is the Office-Sharepoint "integration". It is so clearly a bolt-on afterthought to the whole office suite that I'm a little surprised I have to defend my position.
As far as glacial file transfers that sounds like a SQLServer issue generally.
It could be, but this is two setups now - one with the outside vendor and one done internally. I guess they could both be clueless, but it sure seems par for the course with webdav. SMB blows it away. Try copying a folder with a few thousand files in it to Sharepoint and then perform the same action on a shared network drive.
SharePoint works well because it can allow deep linking within office documents to one another in a reliable version controlled way.
"Works well" is where you lost me. Every once in a while, it simply fails to save the document you are editing silently. The result is that people make a local copy to work on and then upload it as a new version manually (either through webdav or through the web interface). It's a major flaw somewhere - maybe in the kludgy Office "integration", maybe somewhere else. I don't know, but it takes away the major convenience of being able to work with Sharepoint documents directly in Office.
You can also do really powerful searches.
I don't find the searches to be any better than the Twiki searches were with the Google appliance. Sure, the admin can require metadata to be filled in, but that is only as useful as the person who filled it in. And it doesn't help at all for older documents where search would be most useful.
As for not allowing extensions you need, that's definitely a configuration issue that shouldn't be happening.
Yes, the admin will remove them when I request... sometimes. Apparently some of them are big security problems when hosted on a "trusted" internal site so he won't unblock all of them. So I just keep my documents on the shared drive, like I always did, and they don't derive any benefit at all from Sharepoint's search. Or I zip them up to put them in Sharepoint and lose the ability to edit directly.