Thanks for all your help. I could solve the issue.
The "org-root-directory" needed to be specified, in my case "~/bin/org-7.8.03/". I overlooked that fact- and all of your response helped.

Deb

On Sun, Mar 11, 2012 at 3:27 AM, Debaditya Mukhopadhyay <debaditya@gmail.com> wrote:
I have org 7.8.03.

added to my .emacs
(add-to-list 'load-path "org-root-dir/contrib/lisp")
(require 'org-mime)

getting 

File error: Cannot open load file, org-mime

To ensure normal operation, you should investigate and remove the
cause of the error in your initialization file.  Start Emacs with
the `--debug-init' option to view a complete error backtrace.

Any help will be appreciated.