Did you remember to update your view?
Please, follow the steps in the movie so should it work :)
http://files.engineering.com/getfile.aspx?folder=9fed3378-6c0f-472d-838a-b4ff58fd99cf&file=test.avi
I haven´t work much with render sets, but should you not choose both model1 and model2 to be included in your render set? And then choose dotted in "hidden line" dialog box? :)
