WOAH…this took all day to figure out. I found this KnowledgeBase acticle that details a real Workflow killer if you are working / logged in as your SharePoint Service Account: http://support.microsoft.com/kb/953289 ( A declarative workflow that is configured to start automatically when e-mail enabled items are created does not start automatically after you install Windows SharePoint Services 3.0 Service Pack 1). This problem occurs because a security fix in Windows SharePoint Services 3.0 SP1 prevents declarative workflows from starting automatically under the system account. E-mail enabled list items are always created under the system account.
The fix was to log out as the service account (OWSTIMER.exe is running under this account on the MOSS server) and login as myself where i have Full Control or Contribute. Enough rights to start a Workflow.
I found this issue building custom Task email alerts with SharePoint Designer. They just would just not start when new items were added / updated…but i believe could be manually started. I would go into the Task list setting and set "Send e-mail when ownership is assigned?" to No and then build a simple Workflow that would send a custom email template to 'Tasks: Assigned To' when an new item was added. The email template is the same type of Microsoft alert formatting (HTML/CSS) found in this article: Create Custom E-mail Alert Templates for SharePoint Workflows . This also broke my secondary Workflow settings (coming from a Document Library) where I am setting a Due Date to the Tasks.
ggill1970