Are you sure you have Java 1.5.0_06-b05 installed correctly?
try 
java -version 

and

javac -source 1.5

If you get
javac: invalid source release: 1.5

If because your PATH locates a compiler that doesn't support java 1.5

I think this is the problem because 
[javac] import static org.jboss.seam.ScopeType.SESSION;
[javac]            ^

The static import is a new feature in JDK 1.5

Hope this helps

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