rails engines migrations should be checked into source control.
But I don’t see how it’s possible to upgrade database with rails 2.3 plugins migrations to rails 3 engines migrations. (duplicate table and column names, etc.)
When we were working on engines we were taking a look at existing solutions, but we didn’t aim at porting any existing plugins 1 to 1. There were also other approaches.
My migration files are in vendor/plugins/my_plugins/db/migrate/0xx_migration_name.rb
When I run install migrations task, they are copied to db/migrate/2100000xx_migration_name.rb
And when I run db:migrate I end up with migration errors
What you could do is to copy those migrations by hand without changing timestamps. Rewriting timestamps is important only if you need to depend on previous migrations and since you were not using such mechanisms, you should be fine with that. After copying migrations to your app they should be skipped on next migrations:install task.