Typically you just copy your new version of foo.ear or foo.war into the %JBOSS_HOME%\server\foo\deploy directory.
If you're talking about a production clustered environment (multiple instances/nodes in a horizontal cluster, for example) then you can possibly use the farm directoy (which was removed in JBOss 5.0 and brought back in JBoss 5.1). Otherwise you must copy your EAR/WAR and foo-ds.xml files into deploy.
Have you tried deploying the Seam booking example project to see if your JBoss hot deploy actually works? By default, hot deploy is enabled in JBoss AS. Even jboss-log4j.xml is hot-deployable in the server\default\conf directory.
Our team is installing a lab to test hot deploy. Soon, I will post some results.