I've done some searching and there doesn't appear to be a method of migrating old 2003 based profiles to the new "V2" profiles automatically. Specifically, we're interested in retaining the <Profile>.NK2 file in Outlook, the Favorites folder, and the Signatures folder.
I'm in the process of writing a fairly complicated migration script that'll be executed at login, but seems like this is something that I shouldn't have to do.
The User Migration Tool appears to only work for Vista, not 2008 R2. Any other ideas?
Nope. There isn't a way to migrate profiles from W2K3 to W2K8, they're not interchangeable and they're not interoperable. It's a headache but there's no way around the fact that you're going to have to manually copy the components you want (NK2 files, signature files, Favorites, etc.) from the old profiles to the new profiles.