It's S-On because that's what the instructions said it should be on "Rooting For Dummies" under "un-rooting" after flashing Unrevoked Forever.
STEP 8: IS S-ON, ON?
When the FLASH is complete, Reboot the device into the Bootloader screen by holding down VOL + POWER until it boots into the White Screen. Check to make sure it says S-ON on the TOP. If it does, select RECOVERY with the VOL DOWN toggle. (continue to step 9)
If it says S-OFF, repeat STEPS 5 - 7 until it says S-ON.
(NOTE: If still showing S-OFF after a few flashes, go ahead and proceed to step 9. It may show S-OFF, but it is really set to S-ON. Once you flash the PC36IMG.zip file, it should display S-ON.)
Had I known it needed to be back on S-Off to be able to Re-root it I would have found out how to do that before going forward with the repairs.
Does flashing back to a 2.2 version using the RUU method like HtcEvoHacks.com shows work?