form_state not saved when altering form with #ahah callback

Hi,
I've created a module that creates a form which has an 'Add' button. clicking it adds a new row to the from (themed as table)
my problem is that the old values in the form are not saved and reset to their defaults each time I click 'Add'
Any ideas?

source attached: (form in question is 'new_product_form' )

<?php

function elib_menu() {
	$items = array();
	$items['elib'] = array(
		'title' => 'elib test',
		'page callback' => 'page_elib',
		'access callback' => 'access_elib',
		'access arguments' => array('elib'),
		'type' => MENU_CALLBACK,
	);
	
	$items['test/ahah_js'] = array(
		'page callback' => 'test_ahah1',
		'type' => MENU_CALLBACK,
		'access callback' => 'access_elib',
		'access arguments' => array('elib'),
		);
		
	return $items;
}

function access_elib($account) {
     return TRUE;
 }

function page_elib()
{
	$output = drupal_get_form('featured_product_form');
	$output .= drupal_get_form('new_product_form');
	return $output;
}

// main form
function featured_product_form() {
	drupal_add_js('misc/collapse.js');
            
	for ($i = 0 ;$i<3; ++$i)
	{
		$form['portfolio'][$i]['feat'] = array('#type' => 'checkbox');
		$form['portfolio'][$i]['name'] = array('#type' => 'item', '#value' => 'name'.$i);
		$form['portfolio'][$i]['category'] = array('#type' => 'textfield', '#size' => 12, '#default_value' => $i);
		$form['portfolio'][$i]['discount'] = array('#type' => 'item', '#value' => '0%');
		$form['portfolio'][$i]['createdon'] = array('#type' => 'item', '#value' => date('m-d-Y'));
		$form['portfolio'][$i]['cat'] = array('#type' => 'select', '#default_value' => $data->cid, '#options' => array(1 => t('cat1'), 2 => t('cat2')) );
	}
	$form['portfolio']['#tree'] = TRUE;
    	   
	$form['submit'] = array(
		'#type' => 'submit',
		'#value' => t('Submit'),
	);
 
	$form['cancel'] = array(
		'#type' => 'markup',
		'#value' => l(t('Cancel'), 'elib'),
	);
 
	$form['#redirect'] = 'elib';
 
	return $form;
}

// new product form
function new_product_form() {
	//drupal_add_js('misc/collapse.js');
	$form['#prefix'] = '<div id="new_form_wrapper">';
	$form['#suffix'] = '</div>';

	$nkey = variable_get('new_key', 4);
	$nkey++;
	variable_set('new_key',$nkey);
	$form['portfolio'][$nkey]['feat'] = array('#type' => 'checkbox');
        $form['portfolio'][$nkey]['name'] = array('#type' => 'item', '#value' => 'bla'.$nkey);
        $form['portfolio'][$nkey]['category'] = array('#type' => 'textfield', '#size' => 12, '#default_value' => 0);
        $form['portfolio'][$nkey]['discount'] = array('#type' => 'item', '#value' => '0%');
        $form['portfolio'][$nkey]['createdon'] = array('#type' => 'item', '#value' => 'NEW');
    	$form['portfolio'][$nkey]['cat'] = array('#type' => 'select', '#default_value' => 1, '#options' => array(1 => t('cat1'), 2 => t('cat2')) );
	$form['portfolio']['#tree'] = TRUE;
 		
 	$form['add'] = array(
 	'#type' => 'submit',
 	'#value' => t('Add'),
 	'#ahah' => array(
 		'event' => 'click',
 		'path' => 'test/ahah_js',
 		'wrapper' => 'new_form_wrapper',
 		'method' => 'replace',
 		'effect' => 'fade',
 		)
 	); 	
 
	$form['submit'] = array(
		'#type' => 'submit',
		'#value' => t('Submit'),
	);
 
	$form['cancel'] = array(
		'#type' => 'markup',
		'#value' => l(t('Cancel'), 'elib'),
	);
 
	$form['#redirect'] = 'elib';
 
	return $form;
}


// ahah callback 
function test_ahah1() {
	$form_state = array('submitted' => FALSE, 'values' => $_POST, 'rebuild' => TRUE);
	$form_id = $_POST['form_id'];
	$form_build_id = $_POST['form_build_id'];
	$form = form_get_cache($form_build_id, $form_state);
	
	$nkey = variable_get('new_key', 4);
	$nkey++;
	variable_set('new_key',$nkey);
	$form['portfolio'][$nkey]['feat'] = array('#type' => 'checkbox');
	$form['portfolio'][$nkey]['name'] = array('#type' => 'item', '#value' => 'bla');
	$form['portfolio'][$nkey]['category'] = array('#type' => 'textfield', '#size' => 12, '#default_value' => 0);
	$form['portfolio'][$nkey]['discount'] = array('#type' => 'item', '#value' => '0%');
	$form['portfolio'][$nkey]['createdon'] = array('#type' => 'item', '#value' => 'NEW');
    	$form['portfolio'][$nkey]['cat'] = array('#type' => 'select', '#default_value' => 1, '#options' => array(1 => t('cat1'), 2 => t('cat2')) );

    	form_set_cache($form_build_id, $form, $form_state);
	// Rebuild the form.
	$form = form_builder($_POST['form_id'], $form, $form_state);  

	// Render the new output.
	$output = theme('new_product_form', $form);
  	drupal_json(array('status' => TRUE, 'data' => $output));
}

// submit main form
function featured_product_form_submit($form, &$form_state) {
	$form_values = $form_state['values'];
	drupal_set_message(t('main form submitted: ').$form_values);
}

// submit new form
function new_product_form_submit($form, &$form_state) {
	//dsm($form_state);
	$form_values = $form_state['values'];
	drupal_set_message(t('new form submitted: ').$form_values);
}
	
	
// hook theme
function elib_theme() {
	return array(
		'featured_product_form' => array('arguments' => array('form' => NULL),),
		'new_product_form' => array('arguments' => array('form' => NULL),),
	);
}

// theme for main form
function theme_featured_product_form($form) {
	$rows = array();
	foreach (element_children($form['portfolio']) as $key) {
		$row = array();
		if (isset($form['portfolio'][$key]['name'])) {
			$status = drupal_render($form['portfolio'][$key]['feat']);
			$row[] = array('data' => $status, 'class' => 'checkbox');
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['name']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['category']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['cat']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['discount']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['createdon']));
 
			$rows[] = $row;
		}
	}

	// table headers.
	$header = array();
	$header[] = array('data' => t('Featured'), 'class' => 'checkbox');
	$header[] = t('Name');
	$header[] = t('Category');
	$header[] = t('Cat');
	$header[] = t('Discount');
	$header[] = t('Created on');
	
	$output = '<fieldset id="mydiv1" class=" collapsible"><legend>My Portfolio</legend>';
	$output .= theme('table', $header, $rows);

	$output .= '</fieldset>';
	$output .= drupal_render($form);

	return $output;
}


// theme for new product form
function theme_new_product_form($form) {
	$rows = array();
	
	foreach (element_children($form['portfolio']) as $key) {
		$row = array();
		if (isset($form['portfolio'][$key]['name'])) {
			$status = drupal_render($form['portfolio'][$key]['feat']);
			$row[] = array('data' => $status, 'class' => 'checkbox');
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['name']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['category']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['cat']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['discount']));
			$row[] = array('data' => drupal_render($form['portfolio'][$key]['createdon']));
 
			$rows[] = $row;
		}
	}

	// table headers.
	$header = array();
	$header[] = array('data' => t('Featured'), 'class' => 'checkbox');
	$header[] = t('Name');
	$header[] = t('Category');
	$header[] = t('Cat');
	$header[] = t('Discount');
	$header[] = t('Created on');
	
	$output = '<fieldset id="target" class=" collapsible"><legend>New Items</legend>';
	$output .= theme('table', $header, $rows);

	$output .= '</fieldset>';
	$output .= drupal_render($form);
		
	return $output;
}