Today I had a customer need help in SP. SP health Analyzer had a configuration warning saying that some of their SP databases are running in backwards compatibility mode.
Wonder what it means well here is an ok post on it: http://sharepoint.microsoft.com/Blogs/fromthefield/Lists/Posts/Post.aspx?ID=146

So I need to fix the problem, not just stick around on reading other bloggers nice posts about the state

Often these problems occurs when you run the SP Product and Configuration Wizard, in wrong order, or not at all, or some other misc. stuff

Here are my 1-2-3 step on patching and fixing the problem.
After installing CU on all farm server always do this: (stop any antivirus service)

1: run psconfig.exe as admin logged in as SP System Account on front-end server(s) ( SP-hive\BIN) psconfig.exe -cmd upgrade -inplace b2b –wait , if errors or warning inspect log file for ERR and WRN. * –Correct errors and rerun until ok.

2: run the same psconfig.exe command on all other SP servers.

3: reboot all servers. Login to WFE start CA – reanalyze the configuration warning.

Tip: Some warnings might never be fixed, or applicable to fix. Like this one:
WRN            Unable to create a Service Connection Point in the current Active Directory domain. Verify that the SharePoint container exists in the current domain and that you have rights to write to it.
Force the upgrade: psconfig.exe -cmd upgrade -inplace b2b –wait

Note: if you wonder what the difference in b2b and v2v is – b2b is build to build, as in patches. v2v is version to version as in fram SP2007 to SP2010.

-I  Know you think there must be a PowerShell command for this. Yupp there is!
If it is only one database (or a few) in Compatibility mode, you can upgrade this in PS. Example for MySite Content DB.

First find the ID for the DB, run this in PS>
Get-SPContentDatabase -Identity WSS_Content_MySite 

Copy the Id into PS>
upgrade-spcontentdatabase -id 32dbe749-534….etc….

That`s it – keep patching!