And finally it works for me!
Okie I would like to explain what all things I have tried.
Mac configuration:
Mac book pro 13 inch i7 (Early 2011).
ASUS VE228H LED Monitor
Interfaces Experimented:
1. MDP - HDMI - HDMI - HDMI
Doesnt work
OS Tests:
1. Snow Leopard with Thunderbolt update of June 27th - Doesnt work
2. Migration to Lion - Doesnt work
3. Windows 7 Professional via Boot camp - doesnt work
4. Preferences / PRAM setup - doesnt help (but it got better sometimes)
Got sick of the above tests and after wasting more than 18 hrs on this, I made a final try and it worked.
2. MDP - Dual link DVID - Dual link DVID - Dual link DVID
It works like a charm
Conclusion:
I spent 1500$ on my first apple laptop, I felt may be I should spend more 100$ to try out this Dual Link DVI interface. Here is the price list for this DVID stuff
MDP - DVID - 350 SEK / 29 USD
DVID - DVID - 250 SEK / 15 USD
Abreviations:
MDP - Mini DVI port
DVI - Digital Video Interface
HDMI - High Definition Media Interface
DVID - Digital Video Interface Dual link