Well there you go. When I was having a lot of problems initially with my upgrade I had restored the system which set MySQL back to default which was preventing 3 character searches.
I had forgotten all about the restores I had done for MySQL back then as I knew I had set it up before.

Reset it back up in MySQL

[mysqld]
ft_min_word_len=3
[myisamchk]
ft_min_word_len=3

Then stopped and restarted MySQL then:
REPAIR TABLE ubbt_posts;

Then restarted MySQL again and searching for 3 characters works as expected.

Remember that searches for values that exist in 50% or more of the posts will be ignored and it won't return the requested search as it will be too common.

http://dev.mysql.com/doc/refman/5.0/en/fulltext-fine-tuning.html

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