Got the solution guys !!!
While the above problem is different and all we need to do is just stop the service before reinstalling the mysql instance.
The below solution worked for me as I was getting error 1045 while installing MySQL:-
While trying to install MySQL instance, I deleted almost everything I could see e.g. a folder in Program files, searched any entry starting with MySQL in the Search option and deleted them as much as possible. Also cleared the registry and deleted MySQL service again n again. All this didn't work.This happened for weeks.
And then I checked the machine of my friend who successfully installed it and found out that there is a folder called Application Data in Documents & settings/All users and this folder contained MySQL folder with two previously installed instances.
Deleted them and now I'm a happy user
