maybe it is because 4.0.4.GA doesn't come with EJB3? You need to either download and install the separate EJB3 distribution or use the graphical installer.
Thanks for getting back. I had installed the latest: jboss-4.0.4.GA-Patch1-installer.jar and used the graphical interface chosing the "all" option on what type of server and the previous options suggest ejb3 distibution is included. A completely new build too i.e. i didn't go round playing with libs.