Did some more work on this:
We are using the UICamera event system and look at UICamera.lastHit to get details of what has been hit from the main camera, in a class set up as a UICamera.genericEventHandler, which handles all events not handled by NGUI. We use a different layer to differentiate 3D menu events which are handled within the NGUI hierarchy versus other events in 3D space which the genericEventHandler deals with. If UICamera is set to 3D World events the genericEventHandler gets the hit target, if it's set to 3D UI it gets garbage. So this is what breaks 3D interactions if we switch to 3D UI.
The original cause is indeed that because in 3.7.0 in 3D World mode the events are now sent to the GO with the rigidbody, all the existing event handlers we have on NGUI objects with colliders e.g. buttons, no longer get the events, which means to go to 3.7.0 we will have to redo every piece of equipment with an NGUI control interface. Can I ask what this change is for ?
As said below, we have complex 3D objects which contain NGUI control interfaces, that can be moved and therefore have a single rigidbody at the very top level of the GO hierarchy. Having another rigidbody on NGUI panels (as is forced by UIPanel if you don't comment it out) messes with the physics. Sending NGUI events to this top level GO which is outside the NGUI menu hierarchy does not seem to make much sense.