It sounds like you have something in the form  that requires it to have
Full Trust. Fully trusted forms in WSS v3 can't be directly published to
a form library. Do you have any managed code behind the form? Are you
making any web service calls? With a fully trusted form, the process to
publish to a WSS form library  is as follows:

1.Publish from InfoPath, choosing the Administrator-approved option.
You will have to choose a location on the file system to publish the
administrator-approved template  to.
2. Upload published form to form template library in Central
Administration
3. Activate the form to the site  where you want to host it
4. Create a form library and add the newly activated Content Type to
the form library.

This is a quick overview, I can provide more details on the steps if you
need. If you remove whatever is causing the form to require full trust
you should get the option  back to publish directly to a document
library.