Question : How to best deal with a Filemaker dinosaur?

I am requesting expert advice on how to best support a legacy Filemaker (FM) application.  This application has evolved for the past 8 or so years and is becoming ugly.  Unfortunately, the original developer has moved on.  Budgets are small and I am it for support and I don't have a big filemaker background.  The owner has asked me how to best move forward with the application.

Architecture:
We are running FM 9 Pro. The architecture is based on a central FM Server.  There are 8 FM Pro users who access the server continuously.  100 users access some of the web features on an intermittent basis.   We generally skip a generation on versions.  So I will need to recommend if we go to FM 11.

Problems:
  1.  The Schema is out of control and in my opinion, not sustainable.  There is no consistent pattern for design and very little normalization.  Every year, we have to make a new set of tables and redefine our relationships.  These changes propgate EVERYWHERE!  (regrefully, I cannot publish the schema. I would like to)
      Example:  Rather than two tables: Activities and Pay_stubs, we have many.  Activities_2008, Activities_2009, Activities_2010 and Pay_stubs_2008, Pay_stubs_2009, Pay_stubs_2010.  Layouts, portals, and scripts all reference X_table_2010.    Without a design change, I will soon need to make 4 new tables for 2011 data.

  2.  Summary Reports - The user wants the application to provide summary reports on demand without having to rely on MS Excel.  Right now we rely on excel heavily to supplement Filemaker shortcomings. The best summary reports come for Excel Pivot Tables.  Filemaker has no capability to make pivot tables.  

  3.  Integration - A competing program is using a 3-teir RDBMS Solution (RDBMS, Java Business Objects, UI).  Technically, the completeing platform is better engineered and our easiest solution is to let the competing platform absorb us.  But  politically, this is organizational suicide.  Our executives won't go for it.   We will need 2-way integration with the competing system.  They will need query our FM data with SQL statments (or something).

Questions:
  1.  Platform -  Is filemaker the right platform to move forward?  Given the cost to upgrade our licenses, the fact that an major overhaul may be necessary, and the desire to integrate with a 3-tier competitor,  Is there another platform we should consider?  
  2.  Is an upgrade to FM 11 worth the cost?  The only value I see in FM 11 is custom scripts to mitigate FM's lacking pivot tables, and pretty charts. (Am I missing something?)
  3.  If we redesign our schema, to a 3NF design for instance, how difficult is it to repopulate our new tables with our FM Dinosaur data?
  4.  Any other good advice for dealing with FM Dinosaurs?  Anyone had a similar experience?

Answer : How to best deal with a Filemaker dinosaur?

Which meta tag did you use that looks good in IE8 pane of SuperPreview?
In re: close and awarding points.....leave the question open until you are satisfied with the info provided.