I too have a place I HIGHLY recommend. My gsd had surgery here and I also have many friends who have taken their dogs to VOSM. The doctors are fantastic and the facility top notch. After going to their site- on the right side of the page they mention their open house- click on the link for the owners and veterinarians. This place is awesome. I would not think twice about doing the hip replacement surgery.

http://vetsportsmedicine.com/index.html

UVV brought up Stem Cell rejuvenation therapy.  If this had been available back in 2001, I absolutely would have discussed this option with my dog's Orthopod.  I think it's very important to consider  all available options.  Here is the website of the company involved:

http://www.vet-stem.com/smallanimal/

 I have a client who had stem cell therapy for a bad hip in her 8 year old GSD. The results are mixed, but, in my opinion, he is better in his ability to move. His temperament is terrible and he is very aggressive. Initially, I wondered if it was because he was in pain (and it was obvious that he could not move), but pain meds and the stem cell therapy did nothing for his attitude. This is a therapy that has also been used in humans, but I think, for canines and humans, it probably is not the treatment of choice where replacement is.

Good luck.