Friends, first of all sorry for belated reply I was busy solving this puzzling and annoying problem so I wasn't able to come only. Anyway, here how it worked. Since I didn't get the quick reply here I used my own permutation-combination to solve this. It's a bit long reply so that every one can understand it, pls bear with me.
When I found that my pen drives (Kingston data traveler and Mosaer baer, formatted with FAT32) are not working in Windows 7 ultimate RTM. I posted my problem here, but got no quick reply. So, I started applying my own logic and permutation-combination. Being a beta tester and an advanced user it's not difficult for me to do that.
First thing I did was I uninstalled Vista drivers (which were installed without any problem in Windows 7) one by one to check it has any compatibility problem with it or not. After uninstalling every driver, my problem was still unsolved. As a last resort I decided to cleanly installed my windows 7 RTM again. (Note: By clean installation I mean installing Windows 7 by formatting partition, not by up-gradation)
In about 30 minutes the Windows 7 was installed completely again and ready for use. Unlike the previous time I didn't install any driver, software etc. I was obsessed with my pen drive problem and wanted to know why it’s not working in Windows 7. So the first thing I did after the installation completed was plugging in my pen drives to my laptop. This time it detected it and installed the related driver automatically and said your drive is ready for use. Hurray!! Both of my pen drives are now working fine, I cross checked them many times by many ways.
After getting satisfied that they are working I thought the problem has been resolved. (Only to find it later it didn't! how ? read till the end.) So I decided to proceed with other tasks like driver and software installation. I wanted to install latest Windows 7 compatible driver for my hardware. Doing bit of googling I found at this time only ATI 3200 has Windows 7 compatible drivers, that too for Windows RC. Since I wanted to install latest driver so I downloaded it and installed it. Rest of the drivers I downloaded from the Compaq website, the link of which has been given in my first post.
So now my system was “completely” installed with drivers and both of my pen drives were also working fine. But in the evening when my younger brother plugged in Sandisk 8 GB pen drive of his friend it again showing the same problem!! It was not detecting it and saying the driver for the device isn't installed! (Though it was detecting my other two pen drives which I plugged in when my sytem was just completed installation). I couldn’t believe it for a while..and after sometime I again started fixing it using my logic. I went to device manager, uninstalled Mass storage device and then scan the hardware to reinstall the driver but to no avail. Again I was left with no option but to cleanly reinstall my system again.
When I completed installing Windows 7 again, I did the same thing which I did earlier; that is: plugging in the pen drive when windows has just finished installation and ready for use. Surprising it detected that 8gb Sandisk pen drive also and installed the driver automatically! It's working fine like it was working in my desktop PC in which XP is installed.
Now all mine three USB pen drives are working fine in Windows 7. It's detecting them, installing driver for them. But if you install driver and software and then try to plug in "new" USB pen drives then it will not detect and install driver for it. Here by “new” pen drives I mean the ones which were not plugged in when the system had completed installation and ready for use for the first time. After driver and software installation only those pen drives will work which you had plugged in when the system..just completed installation and ready for use..in other words before any driver or any other thing installation.
For every new pen drive you have to reinstall your system again, courtesy Micro****, ouch Microsoft. All hail Microsoft. If I had the drivers for Windows XP then I would not have installed this piece of crap. I’m ready to wager this OS will also be flop like Vista if Microsfot didn’t fix this big, very big hole in its system. Microsoft sucks.
Chums, thanks for bearing me and reading my rather boring story.