starting a new grails eclipse project

hi, tried to start a new grails eclipse project by doing the following:

0. see
http://docs.codehaus.org/display/GRAILS/Eclipse+IDE+Integration and
install the plugin etc.
1. grails create-app and import into eclipse (copying the files)
2. disable check package matches under groovy properties in eclipse
(for config.groovy)
3. add bin-groovy to compiler output location under groovy properties
in eclipse (even though it's in the preferences)
4. delete all the .class file in the root of the project folder
5. add tools.jar as an external lib to the project to fix: Error
starting Sun's native2asci

trying to run gets the following (full output is below):

org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'transactionManager': Cannot resolve
reference to bean 'sessionFactory' while setting bean property
'sessionFactory'; nested exception is
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'sessionFactory': Invocation of init method
failed; nested exception is org.hibernate.MappingException: An
AnnotationConfiguration instance is required to use <mapping
package="org.grails.bookmarks"/>
2008-05-14 20:43:33.991::WARN:  Nested in
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'transactionManager': Cannot resolve
reference to bean 'sessionFactory' while setting bean property
'sessionFactory'; nested exception is
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'sessionFactory': Invocation of init method
failed; nested exception is org.hibernate.MappingException: An
AnnotationConfiguration instance is required to use <mapping
package="org.grails.bookmarks"/>:
org.hibernate.MappingException: An AnnotationConfiguration instance
is required to use <mapping package="org.grails.bookmarks"/>

thanks

Welcome to Grails 1.0.2 - http://grails.org/
Licensed under Apache Standard License 2.0
Grails home is set to: i:\grails

Base Directory: I:\ray\workspace\bookmarks
Note: No plugin scripts found
Running script i:\grails\scripts\RunApp.groovy
Environment set to development
   [groovyc] Compiling 1 source file to C:\Documents and
Settings\ray\.grails\1.0.2\projects\bookmarks\classes
2008-05-14 20:43:28.697::INFO:  Logging to STDERR via org.mortbay.log.StdErrLog
2008-05-14 20:43:29.837::INFO:  jetty-6.1.4
2008-05-14 20:43:29.040::INFO:  No Transaction manager found - if
your webapp requires one, please configure one.
2008-05-14 20:43:29.400:/bookmarks:INFO:  Set web app root system
property: 'bookmarks' = [I:\ray\workspace\bookmarks\web-app\]
2008-05-14 20:43:29.400:/bookmarks:INFO:  Initializing Log4J from
[file:C:\Documents and
Settings\ray/.grails/1.0.2/projects/bookmarks/resources/log4j.properties]
2008-05-14 20:43:29.415:/bookmarks:INFO:  Initializing Spring root
WebApplicationContext
2008-05-14 20:43:33.976::WARN:  Failed startup of context
org.mortbay.jetty.webapp.WebAppContext@172e08e{/bookmarks,I:\ray\workspace\bookmarks/web-app}
Running Grails application..
[0] spring.GrailsWebApplicationContext Refreshing
org.codehaus.groovy.grails.commons.spring.GrailsWebApplicationContext@1a86488:
display name
[org.codehaus.groovy.grails.commons.spring.GrailsWebApplicationContext@1a86488];
startup date [Wed May 14 20:43:32 PDT 2008]; parent:
org.springframework.web.context.support.XmlWebApplicationContext@15a142f
[0] spring.GrailsWebApplicationContext Bean factory for application
context
[org.codehaus.groovy.grails.commons.spring.GrailsWebApplicationContext@1a86488]:
org.springframework.beans.factory.support.DefaultListableBeanFactory@12a2259
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'transactionManager': Cannot resolve
reference to bean 'sessionFactory' while setting bean property
'sessionFactory'; nested exception is
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'sessionFactory': Invocation of init method
failed; nested exception is org.hibernate.MappingException: An
AnnotationConfiguration instance is required to use <mapping
package="org.grails.bookmarks"/>
at java.security.AccessController.doPrivileged(Native Method)
at RunApp_groovy$_run_closure2_closure7.doCall(RunApp_groovy:68)
at RunApp_groovy$_run_closure2_closure7.doCall(RunApp_groovy)
at Init_groovy$_run_closure6.doCall(Init_groovy:128)
at RunApp_groovy$_run_closure2.doCall(RunApp_groovy:67)
at RunApp_groovy$_run_closure2.doCall(RunApp_groovy)
at RunApp_groovy$_run_closure1.doCall(RunApp_groovy:59)
at RunApp_groovy$_run_closure1.doCall(RunApp_groovy)
at gant.Gant.dispatch(Gant.groovy:271)
at gant.Gant.this$2$dispatch(Gant.groovy)
at gant.Gant.invokeMethod(Gant.groovy)
at gant.Gant.processTargets(Gant.groovy:436)
at gant.Gant.processArgs(Gant.groovy:372)
at org.codehaus.groovy.tools.GroovyStarter.rootLoader(GroovyStarter.java:101)
Caused by: org.springframework.beans.factory.BeanCreationException:
Error creating bean with name 'sessionFactory': Invocation of init
method failed; nested exception is org.hibernate.MappingException: An
AnnotationConfiguration instance is required to use <mapping
package="org.grails.bookmarks"/>
at java.security.AccessController.doPrivileged(Native Method)
... 14 more
Caused by: org.hibernate.MappingException: An AnnotationConfiguration
instance is required to use <mapping package="org.grails.bookmarks"/>
... 15 more
2008-05-14 20:43:33.991::WARN:  Nested in
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'transactionManager': Cannot resolve
reference to bean 'sessionFactory' while setting bean property
'sessionFactory'; nested exception is
org.springframework.beans.factory.BeanCreationException: Error
creating bean with name 'sessionFactory': Invocation of init method
failed; nested exception is org.hibernate.MappingException: An
AnnotationConfiguration instance is required to use <mapping
package="org.grails.bookmarks"/>:
org.hibernate.MappingException: An AnnotationConfiguration instance
is required to use <mapping package="org.grails.bookmarks"/>
at java.security.AccessController.doPrivileged(Native Method)
at java.security.AccessController.doPrivileged(Native Method)
at RunApp_groovy$_run_closure2_closure7.doCall(RunApp_groovy:68)
at RunApp_groovy$_run_closure2_closure7.doCall(RunApp_groovy)
at Init_groovy$_run_closure6.doCall(Init_groovy:128)
at RunApp_groovy$_run_closure2.doCall(RunApp_groovy:67)
at RunApp_groovy$_run_closure2.doCall(RunApp_groovy)
at RunApp_groovy$_run_closure1.doCall(RunApp_groovy:59)
at RunApp_groovy$_run_closure1.doCall(RunApp_groovy)
at gant.Gant.dispatch(Gant.groovy:271)
at gant.Gant.this$2$dispatch(Gant.groovy)
at gant.Gant.invokeMethod(Gant.groovy)
at gant.Gant.processTargets(Gant.groovy:436)
at gant.Gant.processArgs(Gant.groovy:372)
at org.codehaus.groovy.tools.GroovyStarter.rootLoader(GroovyStarter.java:101)
Server running. Browse to http://localhost:8080/bookmarks
2008-05-14 20:43:33.07::INFO:  Started SelectChannelConnector@...:8080



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