I work with a municipality that wants EVERYTHING but their titleblock and documentation stamps in Model Space. this is very problematic while designing. So tipically I do all my anotation in PSPACE making sure that all the annotaions are NOT ANNOTATIVE. They do not allow for XREF's, so XREFS are already embedded/biinded just prior to this opperation so no annotation creeps into other DWGs. Then , I go through the drawings and push all annotations from PS to model space via CHSPACE. This makes them happy.
I find when I use annotative text, my DWG sizes start to explode because of all the different annotative scales. It can easilly get out of control, if your not used to it. If your doing 100 DWGs or less.. the above method isn't bad. If your doing 100's of drawings, take some time to learn how to efficiently use the annotative TEXT, DIMS, and Leaders. Then you don't have to go back. And it's very easy in your referenced drawings to just freeze the annotation layer of your xrefs in your viewports. Once done.. it's no longer an issue.