HELP! Xbee to Arduino (no shield)

The project i am working needs to be as compact as possible so I have been trying to get around using a xbee shield. What i understand is, the 3.3v signal from the xbee needs to be bumped up to 5v and the Arduino 5 to 3.3 so the Arduino can read the signal correctly. I’m trying to use the schematics from a working sparkfun xbee sheild. Here The sparkfun board uses two MOSFET’s to do the converting. I have built the same circuit (the MOSFET circuit). But im still getting a jumbled signal. Any help would be much appreciated.

if you require a compact device why not use an arduino PRO mini 3.3V and you will not require 5v to 3v level shifters

Thanks for the quick reply!
If I can't figure this out I will have to go that route. But I would honestly really like to learn how to do the level shifting.

you could use a 4-channel Bi-Directional Logic Level Shifter Converter such as

they are on ebay for couple of £