Moodle 2 has dramatically altered the way files are uploaded and managed. We can now upload content via a link in the HTML editor.
Gone now is the Files directory that used to reside in the course Administration block. In Moodle 1 these files could only be used in that course and if they were needed in other courses they had to be duplicated. In Moodle 2, when we upload a file it is given a reference code which allows it to be accessed from any course we have editing access to. It is stored in a database as opposed to a directory. The File picker has replaced the Files directory and it displays all of the files and folders you have access to including Courses, Private files, and many other possible repositories (i.e., Google Docs, Drobox, etc.)
So how can I get to the File picker?
The File picker appears only as a utility to help you connect your file to your course. Therefore, there are no direct links to it. To access the File picker you must be adding a learning object of some kind (e.g. document, media file, link, etc.) to your course as content in a resource, activity or a block.
Video: How teachers upload files in Moodle 2 [11:27] courtesy of Moodle2OurLearning
Don't forget, files that you use in your course that you have uploaded to your Private files area cannot be shared by other instructors in that same course. These files must be moved to the folder. All of which are located in the Server files repository.
Video: A tour of the File picker [3:24] courtesy of telgleu
Also, for this topic be sure to read the File picker FAQ's...
Last Updated: May 30, 2012