As for the Symbol Manager, I haven't particularly noticed any problems with it, but I do remember I needed to fix a bunch of the blocks when we moved up to 2006. (I also remember purging that stupid ADCADD_ZZ block out of a bunch of them.) I didn't do things the same way as you, though - I set the INSUNITS to FOOT for all of them. We always work with our INSUNITS set to feet - doesn't Land Desktop like to switch it to feet for you?
I can't quite remember the wherefore of it all. Seems like Land Desktop likes to set units to Feet (INSUNITS=2), so we went with the flow. I've seen other people use that solution of setting INSUNITS=0 in acaddoc.lsp, and just working unitless for everything, and that makes sense. I was simply trying to use the feature the way Autodesk intended it, and after doing it the way I have for a while now, I have not seen any real good reason. The Unitless solution seems like it should be perfectly OK.
The whole reason behind this thing was that Autodesk tried to make it so that objects would scale correctly when inserted between drawings of different units. So a drawing done in meters could be inserted into a drawing done in feet, which could be inserted into a drawing done in inches, etc., and everything would scale automagically. But when they did this, they didn't fully appreciate what it would do to the existing symbol libraries. And they didn't implement the whole process correctly, anyway. Here in Colorado, we use US Survey Feet, which are NOT the same thing as International Feet. The way Autodesk implemented things, the autoscaling thing only understands International Feet, which means it produces incorrect results here in Colorado.
In 2007, the new problem was that Plot Style and Lineweight did not work correctly when set to ByBlock. This is something you only notice if you use Named Plot Styles. But when 2007 came out, I had to go through all our blocks AGAIN, and change the Plot Style of all the linework from ByBlock to ByLayer. I also had to change the Lineweight either to a preset value or to ByLayer. When objects inside of blocks in 2007 have Plot Style or Lineweight set to ByBlock, they get their settings from Layer 0, instead of the block. So to keep everything plotting correctly, we had to forgo the flexibility of the ByBlock option, and set everything to ByLayer.
Then, when we started getting into C3D, we had to redo our blocks AGAIN... But that's a different topic.