Actually, the three wire dryer circuits are two hots and a neutral. The exception was that the dryer chassis was allowed to be grounded through the neutral as long as the circuit originated at the service panel and not from a subpanel. The wiring was to be three insulated wires or SE type cable.
I did some research into dryer receptacles and read an article that indicated that yes, the older homes w/3 wire recepts. did use the dryer chassis as a ground. The articles emphasized the importance of disconnecting that ground if converting to a 4-wire plug.
I'm thinking this is over my head and I should get a licensed electrician if I want to change out a 2P breaker to a single phase, re-wire a receptacle, etc. I also want it to be easy to re-convert if/when I sell the house. Do any of you know if this would be against any codes? I do have the NEC here in my office if you could refer me to roughly the right section.