Recently I was setting up a MIM environment that does the most basic approval workflows. Have a user create a contractor in the MIM Portal that requires manager approval. After setting everything up I was getting Access Denied error with the following error - 'Object reference not set to an instance of the object'.. This worked in past FIM deployments so I wasn't sure what the deal was.
Thanks to Dan Malloy for pointing out this blog http://blog.predica.pl/fim-2010-authorization-workflow-fails-with-eventid-3/ which fixed the problem.
FYI if you change an OOB approval workflow, now it becomes custom and it will also change the .NET reference from 3.5 to 4.0 which may cause issues. Switching it back to 3.5 should resolve the issue.