page.replace_html : How to update a DIV using a button

Your code seems right.
But in case that I havn't used submit_to_remote, so I cannot tell you
what you are missing.
Did you use debug to see whether your XMLHttpRequest call can ge
caught by the 'new' action in controller?

However I can tell you that using form_remote_tag or defining a
button_to_remote using remote_function by yourself can do the trick.