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Assuming that you do not have Project Server or are unable to colaborate through Sharepoint, we have found the best first rule is to have the Project files stored in the same folder on a share.  This way everyone has access that needs to for editing or just viewing.  You can limit access by having the files password protected.

You add password protection by selecting the down arrow labeled “Tools” in the Save As box.  Select “General Options” and follow the password entry instructions.  I always check the “Read Only Option” as well – this asks the user if they want to open the file as read only or not when they are opening it.

By utilizing a share folder,r you can update project schedules from either the Master or from the individual files.  I find it a little easier to follow the flow of the interfile links in the Master as I can quickly scroll to a specific task in any of the schedules without having to switch files.

Microsoft recommends no going over 1000 tasks but I have had up to 3700 without too much degradation in performance.  Avoid attaching large word files to tasks or diagrams when you start getting up to these numbers.

Good luck!!