Finally found the cause of the problem. When I installed skype, according to 'Skype HOWTO' I copied the apparmor profile also. And that was the cause of all problems. For some reason skype doesn't like it and stop working. Once I removed the apparmor profile its working fine.

Anyone has any idea how to keep skype running without removing the profile? Let us know. I read about apparmor issue in a thread 'skype and apparmor'. Thanks guys for bring it up.