Collation has nothing to do with migration.
You would have the same problem moving a SQL Server 2000 db to a different collation.
Basically you have to rebuild your tables and indexes in the new collation.
Until then, don't forget: COLLATE DATABASE_DEFAULT is a "mixed-collation" dba's BEST friend.
Kalman Toth, Business Intelligence Architect
SQL Server 2005 Training - http://www.sqlusa.com/order2005grandprix/