Why do people suggest that people use LaTeX? A dissertation is hard enough, I don't want to learn another language just to write it up in. I also fail to understand the benefits that a LaTeX up'ed essay provides over one done in Word.
As for the OP, I can't help. I find references very easy though. You could have them all done in a couple of hours.
It's hardly writing it in another language; if you get a modern editor then it inserts everything you need, plus may even be WYSIWYG (like Lyx). I was a latecomer to LaTeX - I did my BEng dissertation in Word and then learned LaTeX in my fourth year (it really doesn't take long to learn - maybe 1-2 hours for the basics and then anything special you may need can be found on either Google or the WikiBooks entry for LaTeX) and wrote my MEng dissertation in LaTeX. For me there was no question (as an engineer) - writing a dissertation in LaTeX was far quicker, easier to chop and change and formatted the text/figures/tables exactly as required. Maybe someone doing a social science may see less sense in using it; I'm now in the second year of my PhD and I couldn't bear to think writing up and formatting some of the complex fluid dynamics equations in Word! Thankfully the newest Word accepts LaTeX commands into the equation editor, but then if you're doing that you may as well use LaTeX
As for a list of advantages; see
here. For me, it boils down to 1) logical and quick inputs of maths formulae, 2) easy referencing and quick-to-change bibliography formatting, 3) much better handling of large documents and 4) excellent typesetting.
For scientists, engineers and mathematicians it is far more beneficial to spend a couple of hours learning LaTeX as you will save countless hours of equation-editing in Word. Having an excellent and quickly interchangeable reference system is great too if your University asks for a slightly different format. My MEng dissertation contained over 150 equations, some of which were quite complex - LaTeX not only solved the problem with writing the equations but also all the formatting.
To the OP - sorry about the slight rage. If you have plenty of time I'd really suggest looking at LaTeX. Your university may already have LaTeX templates etc to save time formatting; Cambridge for example has their template
here and the online tutorial
here. I remember Sheffield didn't really have that much on it, but the Physics and Mathematics department was quite big on it.
At Sheffield all the networked computers had Endnote on them - I think this is the standard commercial tool for referencing in Word, so your computers may also have them on. I've used it a few times and it's fairly intuitive to use, although I didn't see too many advantages over the standard referencing system in Word, particularly in the 2007/2010 versions.