Hello Steve,
Migration you deploy Java component and extract data form 5.3 and import in 10.
still lots of work to be done like and implementation as there are pre-requisite.
second approach does not need to extract all data from 5.3 system(apart from Ruleset,if at all its required)
I never migrate workflows better to create new one identical and faster i believe .
Second approach is little time consuming but good from my point of view.
In java stack people normally go with 2 system landscape .
there has been client where in ABAP people go with 3 system landscape.
now where tricky consulting part play and which data to be imported where.
and few other points needed to be looked like when you use tools and import data.
you actually import all transaction data which contain all active and inactive
expired.
in you go with 2nd option you will have only valid data to start with.
Regards,
Prasant