@funkyguy4000
Nice of you to read such a long post in class.. Boring lectures are on??? 
Thanx But as I said its last option. Are u referring to burning bootloader via another arduino (or something similar) becoz I have burnt bootloaders via ArduinoISP only... 
SirNickity:
It seems ICSP is working fine -- he says the bootloader is written successfully:Burnt the maniacbug's bootloader 3-4 times -- > Bootloader burns just fine using ArduinoISP tutorial
... so another programmer isn't likely to help anything.
If this is true, that takes out the programmer out of the equation.
From what I understand, the problem is with uploading sketches via serial. From my own research, I see that's rather common. Crossroads and others suggested it's probably the fuse settings that need to be fixed, and westfw found some bugs in the bootloader on the 1284p that have also been fixed.
So, it sounds like the fix is: Get the new OptiBoot from the repo and replace Maniacbug's version. Then, fix the boards.txt entry to use the fuses from the last page or two of the long 1284p IDE thread
I will give it a go.. but plz do help me out here becoz where can I get the edited bootloader? (I have no idea what you meant by " Get the new OptiBoot from the repo") I will try burning the bootloader the first thing tmrw... bit late here...
Thanx for your help...