Okay. I have found how to resolve my issue. The original issue still remains.

I  had followed the jboss official documentation to setup the Oracle 9i data 
source. This tells to setup an xa datasource.

http://docs.jboss.org/jbossas/getting_started/v4/html/db.html

This was giving me the issue. My EJBs could write the data to the db but the 
transaction was not comitted by the container and the data was not reflected 
until I stop the server wherein all commits would seemingly be done and the 
data became visible. The data was not visible even to other ejbs in the 
application when the server was running.

Then I thought of trying the normal datasource. So I followd the documentation 
on the wiki to setup a regular datasource.

http://wiki.jboss.org/wiki/Wiki.jsp?page=SetUpAOracleDatasource

And viola my application started to run fine.

So the issue still remains why does the xa datasource behave that way? Am I 
missing some configuration that I need to do to tell it to commit?

If anybody ever finds it out please do reply. For reference I am giving both ot 
the blocks of my configuration.

this one works ---

    <local-tx-datasource>
        <jndi-name>dbPool</jndi-name>
        <use-java-context>false</use-java-context>
        <connection-url>jdbc:oracle:thin:@dbserver:1521:schema</connection-url>
        <driver-class>oracle.jdbc.driver.OracleDriver</driver-class>
        <user-name>user</user-name>
        pwd

        <min-pool-size>5</min-pool-size>
        <max-pool-size>20</max-pool-size>

        <!-- Checks the Oracle error codes and messages for fatal errors -->
        
<exception-sorter-class-name>org.jboss.resource.adapter.jdbc.vendor.OracleExceptionSorter</exception-sorter-class-name>
        
           <type-mapping>Oracle9i</type-mapping>
        
    </local-tx-datasource>


this one does not ---

    <xa-datasource>
        <jndi-name>dbPool</jndi-name>
        <use-java-context>false</use-java-context>
        <track-connection-by-tx>true</track-connection-by-tx>
        <isSameRM-override-value>false</isSameRM-override-value>
        
<xa-datasource-class>oracle.jdbc.xa.client.OracleXADataSource</xa-datasource-class>
        <xa-datasource-property name="URL">
            jdbc:oracle:thin:@dbserver:1521:schema
        </xa-datasource-property>
        <xa-datasource-property name="User">user</xa-datasource-property>
        <xa-datasource-property name="Password">pwd</xa-datasource-property>
        <exception-sorter-class-name>
            org.jboss.resource.adapter.jdbc.vendor.OracleExceptionSorter
        </exception-sorter-class-name>
        <no-tx-separate-pools/>
    </xa-datasource>


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