Well after a really long weekend I have finally gotten through a SharePoint Services 2.0 to 3.0 migration. The migration itself went about as smooth as most migrations go, you know, plan, double check, triple check, migrate, nothing works. Either way, it is done now and now I am working with a couple quirky things. One thing which has frustrated me for a while was lists and libraries from the migrated site were not showing the Three-State workflow. Apparently this doesn't get turned on on upgraded lists and libraries. Since it took me far to long to find out how to do this, I am posting it here so hopefully it is easier to find.
Basically what I found out is it is NOT a site feature but a Site Collection Feature .
Go to site settings on your site collection root. In my case it was the root site collection.
Click on Site Actions -> Site Settings -> Under Site Collection Administration, select Site Collection Features
Press the Activate button under Three-State Workflow
Now wasn't that easy..