Originally when I was going through the steps and my DB was what *broke* it, I was looking at the defaults to HTML editor with no menu what-so-ever issue.
Now I'm looking at the underlying issue which is that WordPress doesn't seem to be respecting the default-to-last-setup, instead it always defaults to the Visual Editor with the kitchen sink closed.
I replicated this issue on 3 installs:
1. Completely fresh WP 3.0 install, no plugins, no data, nothing.
2. Different WP site that's been running a while, upgraded to WP 3.0 recently
3. My main blog that is where I noticed it - a WordPress blog that has been consistently upgraded everys table release since it started over a year ago.
They are all on one server.
I then looked at another WP install on a different hosting platform. This does what you would expect - if you save with the kitchen sink open it stays open, if you save on the HTML tab it stays on the HTML tab with the quicktags menu open.
Therefore, although a setting in my database was exacerbating the issue, the underlying issue is something else.