After 2 hours of wondering what I did wrong, error was in documentation.
I was trying to use <s:convertEntity /> and get null pointer exception all the time.
Bottom of line is
in seam documentation
http://docs.jboss.com/seam/2.0.0.B1/reference/en/html_single/
in section <s:convertEntity />
says
If your Managed Persistence Context isn't called entityManager, then you need to set it in components.xml: (my case)
<component name="org.jboss.seam.ui.entityConverter">
<property name="entityManager">#{em}</property>
</component>
<component name="org.jboss.seam.ui.EntityConverter">
<property name="entityManager">#{em}</property>
</component>
Thanks, I fixed the docs.