I suggest you start with a seam gen project and then integrate your application.
That is usually easier for me when the first attempt does not work.
That sounds unnecessary (not to mention a hassle) for a project that was already working fine in seam 1.2 . Besides, I tried the relevant XML files from the Seam 2.0 examples, and that didn't help either.
Can this be due to the change from MyFaces to Sun's RI ? If so, where do I look for a solution?
I solved the problem. The solution was using <h:outputText> instead of <h:outputFormat>.