Well, you are right about the examples working correctly!
But I am following the instructions and doing everything through the project panel.
I learned the lesson about touching files from outside Unity the hardway

I am totally lost about what else I can try.
Our project in under source control with Perforce. And I know Perforce and meta files don't care for each other too much.
I even went as far as.
Making the move for NGUI from Assets/External to Assets. Verifying everything worked properly submitting the project to perforce, ensuring the changes worked fine on other computer. Then getting a brand new clean project from perforce and just following the upgrade instructions to the letter.
1. Make a new scene
2. Delete NGUI from the Assets folder.
3. Import the new NGUI package.
If I try the examples on NGUI everything is awesome.
If I try an atlas from my project in the new scene the Atlases are not recognized by the NGUI widget.
I really need to upgrade NGUI as there is a fix that we need for sure.
I am running Unity 4.1.0 I am sure this upgrade process has been test with that version of Unity correct?
Any other crazy ideas I can try. Like delete .meta and recreate some how?