I was able to implement this solution and it works in JBoss 5.1.
As per my understanding adapter doesn't support XA transaction and atleast I couldn't find any trace to set it.
It just that it took so long to come back over here and post but I actually did blog on this topic, check it out
http://vinayshivaswamy.blogspot.com/2012/02/mdb-listening-to-oracle-aq-using-sun.html