There are often slight differences in the structure and contents of the configuration files between versions of JBoss. For this reason I strongly suggest that you always start with one of the example files checked out with jboss or supplied with a binary download, since I have usually updated these with the required changes. In this case, your file would not work with 3.0.1 either, since you missed the change
There is at least one other required change in format, although if you got this far I think you found it.
With 3.1, I suggest you try the simpler oracle-xa-ds.xml file since it is considerably simpler than the oracle-xa-service.xml file.
where do I find the new oracle-xa-ds.xml?
I've looked in 3.0.1rc1 and 3.1.0alpha and it's not there.
Ok, I've found it. I was looking at cvs version a few days old...