Use of the older labelling engine available in QGIS <= 1.8 is now discouraged (i.e. deprecated), but has not been removed. This is to allow users to migrate existing projects from the old to new labelling engine.
The following guidelines for working with the older engine in QGIS 2.0 apply:
Deprecated labelling tab can be enabled/disabled for the current project, via Python console commands, e.g.:
>>> QgsProject.instance().writeEntry('DeprecatedLabels', '/Enabled', True | False)
# or
>>> QgsProject.instance().removeEntry('DeprecatedLabels', '/')
NOTE: There is a very high likelihood the deprecated labelling engine will be completely removed prior to the next stable release of QGIS. Please migrate older projects.