Here is the temporary hack by ramper (ramper@drupal.org) on the workflow module so as to make it work with Views 2. Basically I followed the tip give by KarenS at http://www.angrydonuts.com/attention-views-api-developers#comment-2963. I also did a quick check on the Views 2 API manul at http://views.doc.logrus.com/ though it is clearly meant for developers (and I am not one), just make sure I was putting in the appropriate "parent handler".

I have created the 'includes' folder, with all the separate '.inc' files that are referenced by the workflow.views.inc file. The path to this file is added in the workflow.module, again as per the tip by KarenS. I don't know how to make a patch file - so what I have done is to make a zip file (I am calling it an 'temporary fix' because I'm sure the module developer would roll out a much cleaner set up one of these days.To see the changes I have made in workflow.views.inc and workflow.module, just search for "ramper" - I have included comment lines.

Hope this helps anyone like me who wants to use Views 2 AND the workflow module.

To install:
Just copy the 'workflow' folder to your usual modules location (e.g., sites/all/modules/') and install as usual, create some workflow states. These should now be available in the Views2 UI.
The original README.txt is available inside the 'workflow' folder for anyone just getting started with the workflow module.