Phew .... At last my new USB pendrive and 1 TB USB HDD started working at last. Windows was complaining about "Driver not found" whenever I connected the disk to my laptop - no matter what I do - tried auto detecting, tried troubleshooting tool of windows, tried manual install using "Browse for driver software on your computer" as per the instruction of Seagate, but non worked.
At last I saw a post regarding Vista on Windows Forum, - http://bit.ly/lcqGca - The answer from GearFyre helped me at-last. Below is the quote from his post.
I found the USB device that was in error and right clicked it to get "update driver".
I chose to find the driver myself and had to browse to the c:\Windows\System32\DriverStore\FileRepository\usbstor.inf_xxxxxxxx directory before it would locate anything.
Although I gave "c:\windows" when I tried installing the driver manually, windows didn't find the driver. But when I gave the full path to the "usbstor" as directed by GearFyre, it detected everything and installed the driver properly.