SharePoint 2007 - Troubleshooting - Workflows folder "duplicated"
So, somehow I became the "go to" person whenever someone has a problem with SharePoint, whether it be a strange error, a misunderstanding on how to do something, FireFox doesn't work right (go figure) or someone just plain doesn't like the name SharePoint. In anycase, I received an email with the following error:
"This website does not support workflows created by SharePoint Designer."

The first thing I attempted to do was create a workflow with SharePoint Designer so I could duplicate the problem. So I went to the offending site and sure enough, was not able to create a workflow and received the same error. Using my favorite tool, Google, I found several references to the error message, none of which matched my situation. Then, I noticed something strange about the workflow folder (and I'm kicking myself for not screen-shotting it) - an extra folder named "workflow" was embedded between the actual workflows folder and the main site structure, AND it had a standard folder icon, not the traditional workflow icon. Below is what the structure should look like - imagine a folder like the "Forms" folder, embedded above the workflows folder, named "Workflows."

Checking the properties on the "correct looking" folder, I received a message that the list no longer existed. As part of my troubleshooting, I opened a site which had no workflows, and thus no workflows folder, and created a workflow. SharePoint Designer created the folder structure and inserted the new workflow appropriately - so I blew away the entire folder structure of that site (a test site of course... my "sandbox") and then created the workflow again. As I suspected, the workflow folder structure recreated itself properly and all was well. I performed the same steps on the offending site and workflows are now functioning correctly.
I hope this may help someone else out there who has run out of Advil....