Recently upgraded to DNN 6.

Previously if user 3 was friends with user 1 and user 2, and then user 1 and user 2 were messaging each other on the Activity tab (with default or friends only selected), user 3 was able to see the conversation between user 1 and user 2. I'm not seeing that happen anymore. Is there some setting that needs to be set for that to happen?

I don't think there have been any changes in that area. Check your Default Journal Entry Security, I suggest setting it to Default

My Default Journal Entry was all ready set to default. Another issue I am noticing is that Partners Only and Private are set for Options Available to Members, but when a user views another users Activity tab the security options are not showing up (they do show when a user is viewing their own activity tab). Is there anything else you can suggest?

Is the lock icon displayed at all? If so, what does it show when you click it?