I don't use the state-field at all, it only leads to troubles...
This is what I chaged:
*Removed all state fields from admin as well as from customer notifications.
*Reordered the address fields in admin (please see screenshot):
Billing address first, then shipping address and customers informations
*Added order-no to emails

Please install 5.0.6.6 before - this mod is based on that version.

This is just a modification, no full package !!

greetz
anton

More...