Now how do i make a device to act as router and other as end device... I think it will be governed by the sleep mode value i set. If i set ATSM 0 (sleep mode off) then it will act as router and for ATSM 1 and ATSM 2 as end device.
Yep, that's right. It sounds like you'll have more than enough routers for your end devices, but remember that each router can have a max. of 8 end devices, so make sure your network is arranged to allow for that.
Now as znet 2.5 and xbee series 2 are same ( i think so) what is the difference in firmware 1241 and 1220
IIRC, there are separate firmwares for the "ZNET 2.5" stack and the vanilla "ZigBee" stack. Off the top of my head, I think there are some additional commands allowed in the ZNET firmware that aren't available in the ZigBee firmware. I've only used the ZNet 2.5 firmware myself.
While trying to upgrade my xbee 24-B firmware, something happened and the upload was not successfull. Now i am not able to read the setings again. It says cant read the version. Is there any way to restore the XBee module defaults or i screwed it up?
How are you flashing the XBees? Are you connecting the XBee to a chip-less Arduino or are you using an FT232 breakout as in this drawing? Are you able to talk to the module by sending AT commands over the serial connection? When you go to flash the firmware, there is a "Restore" button next to the "Read" and "Write" button that will reset the module to factory defaults; that may work for you. Hope that helps!