Hibernate version:
3.1 rc 1, Hibernate annotations 3.1b6

Name and version of the database you are using:
Oracle 10g

System.setProperty(Environment.HBM2DDL_AUTO, "update");

When I get a session factory, and Hibernate runs schema update (creating tables and constraints,) it is ignoring any @Index annotations that I've provided in my classes. No indexes get created. Am I doing something wrong, or is this a bug?

Ask the question on the tool forum, max will most certainly answer this one.