I can flash the xbee units but it fails because reset does not seem to be working. I have tried using both reset buttons(Xbee and Arduino) It seems that the unit does get partially programmed. The function set is changed but the node and PAN ID are still the same.
To reset the XBee, you just need to bring the XBee reset pin (pin 5) low (connect to ground) for a moment. When I am reflashing my XBees, I just use a bare wire jumper for this purpose.
I'm not sure what you are referring to by "both reset buttons(Xbee and Arduino)"; if you are using the XBee Shield, the rest button on it is for the Arduino, not the XBee. If you are using a button in the circuit as shown in the PDF tutorial, than the button should reset the XBee since it does the same thing as the bare-wire method above (momentarily connects XBee pin 5 to ground).