Thanks a lot rosered!!! :-)
I managed to solve the problem with XP. And I went through the following steps.
(There was a small trick with this USB Debugging thing)
1.) Download the latest PC Companion under from SE under "X10 - Mini" Support.
2.) Connect the USB, PC companion identifies the phone.
3.) Disconnect the phone, and enabled USB debugging under "Development".
4.) Connect the phone again, this time I noted that it installed a special driver called "sa0101ADB".
Just after that I followed the instructions in the PC Companion, and this time when I connect the phone while pressing the back key, it did detect and installed the SEMC USB flash driver.
Now I am having Android 2.1 without any issue.