hi michinyon,
Thank you that was by far the clearest explanation i have read so far. 
now I understand how it operates... is all boils down to the right size of resistor for the pull ups.
Thank you for pointing me to the right direction.
Update:
i was able to resolve my problem due to your explanation on how I2C works. did some code changes as the i2c reads the default 8-bit value as 255. the x-axis movement towards -X(left) was from 0-127 and the movement to the +X(right) was 255-128.
