'guess I am answering my own question after fiddling with this some more, for posterity though, might be worth it, anyway, it wasn't an easy week so bear with me.
did not give out the whole story because I thought it's not related.
this is a new machine with new fresh 2012 sp2 installed.
I brought in my old SolidWorksData folder from the old machine which had the 2011 version, but only the Browser sub-folder not just overwrite the whole thing. I've also saved the new Browser subfolder (the one created when I installed 2012) under a different name just in case.
By doing this, my old drawings opened just fine and all fasteners were there in the right size. And then I noticed this Toolbox issue. The Toolbox would be fine if I revert to the brand new created SolidWorksData folder.
What you have to do, you go to the new Browser folder that you renamed for safety and copy the ToolboxFiles.index file (which is the one created with the new install) into the current Browser folder. I have also copied the old ToolboxVersion.dat into the current SolidWorksData folder, saving the freshly installed with the same name, under a different name (also for safety), but I am not sure that made a difference.
Now toolbox is there all the time and my old fasteners are still there which is great.
Did not do my homework on this so I don't know if there is a better way. Maybe somebody else can chime in.