Wheres the Manually Approve option?

This is how you do it.
First disable registrations on your website.

Then go to System & Settings > Permissions & Access > Workflows and click "Add wokflow"
Give your worflow a name e.g. "Registration Activation". Select the Basic workflow type. Save.
Now it shows you a list of tasks. Click on "Edit Details". Then click on "Approve or Deny" then from the popup, under "included" click add to add the user or users who will be responsible for the user activation. save and save.

You can also modify the other workflow tasks to define who gets notification for instance.

Now save your worflow.
Second step go to System & Settings > Permissions & Access > Users permissions
There click on "Activate/Deactivate users" (Admin is probably already set for that task). In the popup that opens, set your users and under the tab "workflow" select the workflow you just created in the previous step.
Now save (the popup) and save (the page)
Almost the Final step go back to System & Settings > Login & Regsitration > Public Registration and activate registrations again (option On - anyone can create an account from Login page)

And you're done. Now try to register an account and it will tell you that the account will have to be activated.

Anf final step, how do you actually activate or deny them? Log in as the user who has to permission to activate/deny accounts and go to the Welcome page (the top link in the right hand administration menu). There click on the tiny link that says "Waiting for me" which you can also find in the right hand menu under Welcome.
You will see a list of workflow stuff that happened. Some of them will be "User submitted for Approval." and a chack in a circle next to it. Click on the check and you will be given options to review, activate, deny.

I know this all sounds like a giant pain in the rompus but it opens up a world of possibilities...