The problem is solved. Arduino uno was connected through a self-powered 4port hub with chipset SMSC, USB20H02 device to my laptop. Removing the hub; the board works, using a different brand hub and it works also. Question I have now is why does the hub for my project not work with Arduino Uno properly. It does show the COM port and is a configured usb device, yet it fails. A mouse and keyboard connected into the same hub also works.
I have installed snoopy pro to sniff the USB traffic in an attempt to find out the difference between my two hubs.
Regards,
giggler