As suggested by you, I have given driver = "vesa" in XF86Config file.
I am getting different error screen when I run startx and the cursor also does not return back to command prompt ( Do I need to run any other setup before running startx).
It actually looks like X started up fine, but one of the programs being run by startx is hanging instead of continuing. Try 'startx `which xterm`' (replace xterm with whatever terminal emulator you have installed) and see if that starts up fine.
If you have a custom ~/.xinitrc or such, make sure that all the programs in it except the window manager (or whatever you use) are started with '&' so that they're run in the background. For example,
xterm & wmaker
instead of xterm wmaker
since the former will cause an xterm to start up and the script to not continue until that xterm is exited.
Craig Ringer
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