Jibu,
Do you have ‘build workspace automatically’ selected? The recompile should push the changes out to JBoss if that’s the case. Also, I assume you’re changing Java files, not descriptors of some sort, correct? Finally, what JRE version are you using to run MyEclipse and JBoss? If they don’t match, this can sometimes cause errors (ie JRE 1.5 for one and JRE 1.6 for the other).