Raghu,
You can use MyEclipse to help you debug anything that you have deployed within a WebLogic 7.0 container, including your RAR since the WebLogic process. If the source code for your RAR is contained in a MyEclipse project, you should be able to perform normal debugging operations on it (breakpoints, variable inspection / modification, step through code, etc.). You simply need to package your project as a RAR (probably via an Ant script), deploy it within WebLogic (possibly by copying it to the domains ‘applications’ directory), then start the server using MyEclipse.
By the way, you can debug your RAR within JBoss using a similar technique with MyEclipse too.
–Scott
MyEclipse Support