No, we don't need to have it on for anything else, however the documentation says that it has to be turned on to allow Canreservefromotherbranches to work.
There seems to be some confusion about what Canreservefromotherbranches is supposed to do: http://bugs.koha-community.org/bugzilla3/show_bug.cgi?id=2394 The simple answer is that you can ignore Canreservefromotherbranches because with IndependantBranches off it is normal behavior for patrons to be able to place holds on titles at other libraries. Normally I would say check over your circulation and fines rules in Administration. Can holds be placed as expected for items at the patrons' own library? Does the hold message give you any details? -- Owen -- Web Developer Athens County Public Libraries http://www.myacpl.org