Try the remote debug monitor (option -gr of the linker). Then the console viewer should connect and should show the display as well as all text sent to System.out/err.
Trouble is, that NXT is not ready for connections by the consoleviewer all the time. You need to start some kind of "server" on the NXT. This is done automatically by the "-gr" option and you can probably start the server manually.
Works fine for me. Are you sure you are running the debug configuration? If so the NXT will display "Remote Console.." then when you run the command nxjconsoleviewer you need to ensure the show remote LCD screen is checked and then hit connect. The display on the NXT should change to "Console open" and your program should begin to run with the display in the console viewer window being updated.
Hi Aswin, When you run the program from Eclipse you need to "debug" it by using the little "bug" icon rather than the "play" icon (and you need to have set the debug options in the project profile as explained earlier...).