I have opened up bug http://jira.jboss.com/jira/browse/JBSEAM-1751 regarding this. The latest HelloWorld example in the 2.0 cvs head branch results in the same problem.
I added a glassfish example for seam remoting in examples/jee5/remoting. Please check it out for config examples.
Thanks a lot Michael for your help again. I'll be sure to check it out. I've managed to be able to get the other areas of Seam working as expected this is just one area which I have beating my head against a wall with.
S.D.