Cover and line of sight.

[jetpendragon]

In an area where the player is looking up on a balcony aiming his +1 Shortbow of Seeking at an opponent. He moves closer to get the point blank bonus. At this point the DM says that the player no longer has line of sight due to the cover of the rail of the balcony. The player argues that to bow with its seeking ability forgoes the cover/concealment. Does that also forgo the line of sight? Should he have gotten the shot?

[Khedrac]

OK firstly let's look at Seeking:

Seeking - Only ranged weapons can have the seeking ability. The weapon veers toward its target, negating any miss chances that would otherwise apply, such as from concealment. (The wielder still has to aim the weapon at the right square. Arrows mistakenly shot into an empty space, for example, do not veer and hit invisible enemies, even if they are nearby.)
Strong divination; CL 12th; Craft Magic Arms and Armor, true seeing; Price +1 bonus.
There is no mention of ignoring cover. Cover does not provide a miss chance, but a straight AC bonus (4 normally, but it can be more).
Also
Total Cover - If you don’t have line of effect to your target he is considered to have total cover from you. You can’t make an attack against a target that has total cover.
What the DM appears to be saying is that by moving close enough to get within 30', the character moved to the point where he could no longer see his opponent - which equals automatic miss (you hit the balcony instead).

Without knowing the height of the balcony and it's edging and how close the opponent is to the edge one can't do the maths to check if this is an accurate call, but it is reasonable (and remember rule 0).
Also if the player using the Seeking Bow is attacking creatures with cover the DM should be remembering to add the cover bonus to their AC - the enchantment does not negate it.

[Curmudgeon]

The simple rule is that if you can't see a creature, you can't target it. You must have line of effect to attack anything in D&D (because a missile flies in a straight line rather than a parabolic arc), and you must have line of sight to target a creature rather than just a square.

Seeking uses confusing language because it refers to a "target" when you're only aiming at a square. What if there are multiple creatures in that square? If you can't see them you can't actually pick a creature as a target, so this weapon property is going to need some DM adjudication.

[jackattack]

No, you are aiming at a target that is in a square. It has to be a valid square with clear line of sight/effect and no obstacles, and it has to be a valid target that isn't invisible or otherwise concealed. And you have to shoot at the target -- you can't pick a target that is north of you and fire your arrow south, thinking the arrow will do a big u-turn and find the target.

If the balcony railing was solid, or the attacking character was actually beneath the balcony (firing up at 60 degrees or steeper), then the target's square was probably blocked in such a way that the shot was impossible. If the balcony railing was a horizontal bar held up by risers or posts, and/or the attacking character was firing at 45 degrees or less, then the target was probably sufficiently visible for the shot to have gone off (with the AC bonus for partial cover).

But frankly I think trying to stack the point blank bonus on top of the seeking bonus is gilding the lily.