PDF Generator, WatchFolder problem

I've successfully installed PDF Generator on a server.
I've tried to convert native files to the PDF using adminUI console
and it works! Also it works with really cool AIR application to
convert files to the PDF with just simple drag&drop.
But the WatchFolder endpoint is not working (see the exception below which I've c&p from the failure directory)
for the WF settings I was using ConvertAllFileTypesToPDF: 1.0 service,
and configured the settings for the input and output variable as followed:
inputDocument: *.*
output PDF document: %F.%E.pdf

but as I've said at the beginning it is not working, here's the exception:

Failure Time----Fri Jan 18 11:15:01 CET 2008
source location ---- Reason of failure is-----Failure to invoke the job ConvertAllFileTypesToPDF
Failure to invoke the job ConvertAllFileTypesToPDF
Invocation error.
javax.jms.JMSException: Could not create a session: javax.resource.spi.CommException: javax.naming.NameNotFoundException: XAConnectionFactory
Could not create a session: javax.resource.spi.CommException: javax.naming.NameNotFoundException: XAConnectionFactory
ALC-DSC-600-000: com.adobe.idp.dsc.provider.service.scheduler.impl.SchedulerRuntimeException: Failure to invoke the job ConvertAllFileTypesToPDF
at com.adobe.idp.dsc.provider.service.file.scan.impl.FileScanJobImpl.invokeJob(FileScanJobIm pl.java:323)
at com.adobe.idp.dsc.provider.service.file.scan.impl.FileScanJobImpl.processInputs(FileScanJ obImpl.java:127)
at com.adobe.idp.dsc.provider.service.scheduler.scan.impl.AbstractScanJob.execute(AbstractSc anJob.java:56)
at sun.reflect.GeneratedMethodAccessor381.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:585)
at com.adobe.idp.dsc.component.impl.DefaultPOJOInvokerImpl.invoke(DefaultPOJOInvokerImpl.jav a:181)
at com.adobe.idp.dsc.interceptor.impl.InvocationInterceptor.intercept(InvocationInterceptor. java:134)
at com.adobe.idp.dsc.interceptor.impl.RequestInterceptorChainImpl.proceed(RequestInterceptor ChainImpl.java:44)
at com.adobe.idp.dsc.transaction.interceptor.TransactionInterceptor$1.doInTransaction(Transa ctionInterceptor.java:74)
at com.adobe.idp.dsc.transaction.impl.ejb.adapter.EjbTransactionCMTAdapterBean.execute(EjbTr ansactionCMTAdapterBean.java:336)
at com.adobe.idp.dsc.transaction.impl.ejb.adapter.EjbTransactionCMTAdapterBean.doSupports(Ej bTransactionCMTAdapterBean.java:212)
at sun.reflect.GeneratedMethodAccessor337.invoke(Unknown Source)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:25)
at java.lang.reflect.Method.invoke(Method.java:585)
at org.jboss.invocation.Invocation.performCall(Invocation.java:345)
at org.jboss.ejb.StatelessSessionContainer$ContainerInterceptor.invoke(StatelessSessionConta iner.java:214)
at org.jboss.resource.connectionmanager.CachedConnectionInterceptor.invoke(CachedConnectionI nterceptor.java:149)
at org.jboss.ejb.plugins.StatelessSessionInstanceInterceptor.invoke(StatelessSessionInstance Interceptor.java:154)
at org.jboss.webservice.server.ServiceEndpointInterceptor.invoke(ServiceEndpointInterceptor. java:54)
at org.jboss.ejb.plugins.CallValidationInterceptor.invoke(CallValidationInterceptor.java:48)
at org.jboss.ejb.plugins.AbstractTxInterceptor.invokeNext(AbstractTxInterceptor.java:106)
at org.jboss.ejb.plugins.TxInterceptorCMT.runWithTransactions(TxInterceptorCMT.java:363)
at org.jboss.ejb.plugins.TxInterceptorCMT.invoke(TxInterceptorCMT.java:166)
at org.jboss.ejb.plugins.SecurityInterceptor.invoke(SecurityInterceptor.java:153)
at org.jboss.ejb.plugins.LogInterceptor.invoke(LogInterceptor.java:192)
at org.jboss.ejb.plugins.ProxyFactoryFinderInterceptor.invoke(ProxyFactoryFinderInterceptor. java:122)
at org.jboss.ejb.SessionContainer.internalInvoke(SessionContainer.java:624)
at org.jboss.ejb.Container.invoke(Container.java:873)
at org.jboss.ejb.plugin