In particular I have a console Java application created in XCode 2; the project opens fine in Xcode 3 but it won't build. So I put my code in the Organizer generated java app and it works fine, but I would still like to get it the old way with the project file...
Depending on which Xcode 2 project template you originally used, the old way may not be possible.
Xcode 3.2 completely removed the 'jam' build system. Jam was the builtin Xcode build system since the beginning of time. Xcode 2 introduced a "native target" build system, but that can't build Java targets.
Xcode 2 also introduced Java project templates that used the Ant build system. So if your original Xcode 2 project was jam-based, then Xcode 3.2 can't build it at all. There should be an error message that mentions jam in the build results window. It may also give the bogus recommendation to convert it to a native target.
However, if the original Xcode 2 project was Ant-based, then Xcode 3.2 should be able to build it as-is. Ant requires a "build.xml" file, which it uses to tell it what and how to build. If that file is missing or deleted for some reason, then Ant can't build. If that happens, Ant should emit the "build.xml can't be found" error message.
If the Organizer project can't be built because build.xml is missing, then you'll have to restore build.xml. The simplest way I know to do that is to create a new Organizer Project from an appropriate template, then move your existing src folder over to the new project (use Finder). Don't delete build.xml in the new project.
Java beginners may find it easier to start writing code by ignoring Xcode 3.2 and using an IDE designed for beginners: BlueJ.
http://www.bluej.org/
There are other Java dev tools available. BlueJ is just one that others I've suggested it to found useful for getting started. Some people dislike it because it's not a pro-level IDE. Those people might be better served by a professional tool, rather than one oriented toward education.