To do distributed transaction propagation you need to install the JTS version of the JBossTS product. There are issues with the (inbound) IIOP invokers on 4.2 but the default (propagation via RMI) should work. Note that for these reasons the 4.2 version is not supported.
I will be highly thankful and appreciative if you can further provide the precise server version and corresponding JBOSSTS version on which the Remote EJB Transaction Context propogation works. Currently I am using JBOSS AS 4.2.3 .
In 4.2.2 Version there was a problem with Remote EJB invocation but in 4.2.3 things seemed to work fine.
Also do I need to separately download and configure JBOSSTS JTS and JTA jars for in latest versions?
I somehow got the info that they ship in with newer versions of JBOSS AS.
The JTA jars ship with the AS ready-installed in the default server. The JTS jars are not currently shipped with the AS (that is about to change with the latest AS 5.x release).
If you want to use JTS you need to obtain a JBossTS source tree from svn, build the JTS jars and then replace the JTA jars with the newly built JTS jars. Instructions can be found in the JBossTS source tree (see ArjunaJTS/INSTALL).
Ideally you should use the JBossTS source version which was used to build JBossAS 4.2.3 i.e. JBossTS 4.2.3.SP7.