In addition, you also need to change persistence.xml to the new struture:
<persistence>
  |   <persistence-unit name="mydb">
  |     <jta-data-source>java:/DatabaseDS</jta-data-source>
  |     <properties>
  |             
  |             <property name="hibernate.hbm2ddl.auto" value="update"/>
  |         
  |         <property name="hibernate.dialect"  
value="org.hibernate.dialect.MySQLDialect" />
  | 
  |         <property name="hibernate.cache.provider_class" 
  |                   value="org.jboss.ejb3.entity.TreeCacheProviderHook"/>
  |         <property name="hibernate.treecache.mbean.object_name" 
  |                   value="jboss.cache:service=EJB3EntityTreeCache"/>     
  |       
  |     </properties>
  |   </persistence-unit>
  | </persistence>
and it is better to change xxx.ejb3 to xxx.jar
Details please see
http://wiki.jboss.org/wiki/Wiki.jsp?page=FromJBossEJB3.0RC3ToRC4PFD
Good luck!

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