Ok, from what i understood it seems the prolonging nepomukserver process seems to be the culprit?

I could not repeat it successively.

Does that mean the crash could no longer be reproduced or that killing nepomukserver only worked once (notice that for whatever reason it remains up, that reason will likely still exist, so you'd actually have to kill it after each logout - what should happen anyway since it has graphical dependencies and the X server should be restarted with each logout.)
No idea what's going on there on your side

Thanks Lueb and Ben,

It was appearing weird from beginning. It was always far from straightforwad and you guys persisted for long.

"I could not repeat it successively" meant that once nepomukserver was killed from VT1 I had to login twice to razor. When I logged out of razor I was again kicked out by firefox from kde. Later on when I logged out of kde and I tried to kill nepomukserver from VT1 in order to login into razor, I did not have to login twice but firefox logged me out.

Thanks to both of you again for spending time. I learned few things out of this experience.

If you start a basic failsafe session, then run "firefox" does Firefox launch safely?

No. Situation is same and I was logged out.

rather sounds as if ff crashes x11 - do you have it's hw acceleration enabled?
(somewhere in about:config, can't test atm)

just to make sure, by "basic failsafe" we all mean "naked x11 + xterm" - no desktop, no windowmanager etc.?!

Sorry luebking,

I ran plasmadesktop failsafe mode. Will do the correct thing by monday.

I have tried to disable hardware acceleration earlier, but it did not mae any difference. It was done from preferences-> advanced -> browsing.

I just could not log in basic failsafe session. I was just sent back to login prompt. After two or three attempts I tried to log into plasma session but firefox logged me out upon the first time.

A basic failsafe session will probably try to start XTerm. Please make sure it is installed.

Xterm and UXterm are instaled in the system. Did I miss something

Does ~/.xsession-errors mention any reason why a failsafe session fails to start?

Content of ~.xsession********** file

Xsession: X session started for rthakur at Tue Apr 10 09:35:12 IST 2012
Setting IM through im-switch for locale=en_IN.
Start IM through /etc/X11/xinit/xinput.d/all_ALL linked to /etc/X11/xinit/xinput.d/default.

Content of other files are in the pastebin
http://paste.kde.org/454676/

Certain XIM enries are empty.
If I remember correctly, xterm and uxterm was uninstalled earlier and I reinstalled it back.

Good news!!!!!!!!!!!!!!!!

The latest updates (kde 4.8.2) have fixed the problem. KDM was also updated in this time. Kindly let me know if you want logs from some places.

Given this issue appears to be fixed, further information should not be required at this time.