I am using 2 XBee series 1 1mW chip antena modules, one connected to my PC with XBee explorer from sparkfun and other on my arduino UNO with XBee shield.
I have simple Processing program sending message to arduino to turn LED on and off.
And here is the problem - they work only if the range is not bigger than 50cm between them (!!!!). It supposed to be 100m visibility range. Since they are actually sending the info i assume that the problem is not with them being on wrong channels etc. And my baud rate is set to default 9600.
If you need other parameters please say so.