Steps to reproduce:
1. Import existing Seam 2.2 project into workspace
2. Add valid Seam runtime to the project (in Seam Settings)
3. No project is selected in package explorer!!!
4. File -> New -> Seam Generate Entities
5. Fill in imported project name (or try to select project using Browse button)
6. Following error occurs: Selected seam project has some invalid settings. Please press "Settings..." and correct them.

In settings is everything fine, project has valid Seam runtime and this error still occurs.