In general, what you describe should be working. I'm assuming that you have code on one Arduino that is bringing a pin high and low when it receives "H" and "L" over the serial port. And code on the other Arduino that sends an "H" and "L" to the first one. That's right?
By the way, noticed this on your blog:
The Xbee configuration has proven to be a challenge, especially as there aren't that many good tutorials on setting up the series 2 Xbee's.
As it happens, I'm writing a book about Building Wireless Sensor Networks that's focused on the XBee Series 2 hardware. Early chapters are available now on O'Reilly Rough Cuts: http://oreilly.com/catalog/9780596807740