Got this working finally. Think that it was the hibernate.properties file not liking up properly with the transaction manager.
Just for information sake, if anyone could tell me, or point me to the right place that explains what options I have with transactions and how/when they are committed to the database.
For example, I've read before that hibernate can be very finely tuned as to when info gets written to the database. How do we do this with ejb3?