Spring 3.1, Hibernate 4, SessionFactory

I think you should use org.springframework.orm.hibernate4.LocalSessionFactoryBean instead of
org.springframework.orm.hibernate3.annotation.AnnotationSessionFactoryBean

From LocalSessionFactoryBean javadoc:

NOTE: This variant of LocalSessionFactoryBean requires Hibernate 4.0 or higher. It is similar in role to the same-named class in the orm.hibernate3 package. However, in practice, it is closer to AnnotationSessionFactoryBean since its core purpose is to bootstrap a SessionFactory from annotation scanning.

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