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I have the following error when I run my Spring 3 application :
org.springframework.beans.factory.BeanCreationException: Error creating bean with name 'sessionFactory' defined in ServletContext resource [/WEB-INF/dispatcher-servlet.xml]: Instantiation of bean failed; nested exception is org.springframework.beans.BeanInstantiationException: Could not instantiate bean class [org.springframework.orm.hibernate3.annotation.AnnotationSessionFactoryBean]: Constructor threw exception; nested exception is java.lang.IllegalArgumentException: 'configurationClass' must be assignable to [org.hibernate.cfg.Configuration]
I don't see a problem with your config (assuming you are using hibernate 3.x)
However the error you are seeing is usually a classpath issue. Your application server may be loading the annotations jar with a different class loader. Try to explicitly add the hibernate annotations jar to your applications classpath.