Finally I licked this problem....pure luck I guess!!
Seems like some problem with the installer program. Inspite of uninstalling and reinstalling the devices and downloading various versions of drivers including peeking into the cabinet to check the right version of the motherboard chipset and finally reaching nowhere.. I decided to reinstall the OS and try to install windows again but all for nothing.... The device still showed up as 'unknown device'
at last in desperation I decided to change some of the install options while installing the driver for the printer
1. I decided to install just the drivers and not the programs that go along with it.
2. I changed my choice of printer to be installed from HP 3050 to HP 3052/3055/....etc
Bingo it installed everything including the drivers for HP 3050 and when I connected the printer it immidiately picked it up and everything was fine.....
Thanks for all the support keeps one going..!!