Recently we performed a database attach upgrade of our MOSS 2007 farm to SharePoint 2010. One of our Site Collection Admins reported that when he went into his document library settings to try and create an out of the box workflow, there were no templates listed. This was happening on all document libraries in the site collection. I checked the site collection features and all workflow related features were activated. I opened the site in SharePoint Designer and Workflows had nothing listed. My next step was to see if deactivating/reactivating the workflow features would work. I deactivated the SharePoint 2007 Workflows feature and reactivated it, then I went into the document library settings and there was still no workflow templates listed. Next I tried deactivating the Workflows feature. The deactivation went off without a hitch but when I tried to Activate it I got the following error:
After reviewing the ULS logs I found that there was an error creating a list called '_catalogs/wfpub' on the root site. In SharePoint Designer I went to All Files/_catalogs and noticed that there was a sub folder called wfpub and within that folder there were empty subfolders for each of the OOTB workflow templates. The icon for wfpub was a directory icon, not a list icon. I renamed the wfpub folder to wfpub1 and reactivated the Workflows feature. This time it worked, a new wfpub list was created and the templates were showing up in the document library workflow settings.
One piece of fall out from this is that by deactivating the Workflows feature on the site collection, it removed an OOTB workflow that was setup for a list on a subsite. It was easy enough to recreate but you should probably go through all webs in the site collection and document the workflows that are there.