Here is the right solution which i got from MS.
Plan A:
1. From Start-Run, launch Proxycfg.exe, see if it returns any proxy settings
2. If not , run the command proxycfg.exe -u
3. Run Proxycfg.exe again to see if the tool had successfully pulled the proxy settings as required
4. Now try to start the Services Host service
Plan B:
If Plan A fails, then lets follow the steps below
1. Verify that you are running CLR build 2.0.50727.926 or later and install appropriate update
a. Navigate to %windir%\Microsoft.Net\Fra
mework\v2.
0.50727
b. Right-Click on mscorwks.dll and select properties
c. On the Version tab, check the file version. If the version is 2.0.50727.926 or later, you do not need to apply the fix. Move on to Step 2.
d. Install fix from
http://support.microsoft.com/kb/942027 . This contains the update outlined in
http://support.microsoft.com/default.aspx/kb/936707 which will be used to work around this issue.
2. Verify if the configuration files namely
Microsoft.Exchange.Service
Host.exe.c
onfig exists in the Bin directory , if not create configuration file for this Exchange 2007 service. To create an application configuration file that contains this configuration setting, follow these steps:
a. Create a file, and then name the file the
.exe.config file. (you can find the by right clicking on the appropriate service)
b. In a text editor, open the file that you created in step 1.
c. Add the following code to the file.
3. Save the changes to the file.
4. Restart the Services
Note:
If the config file already exists then you should not overwrite any existing settings in the .config file. It is ok to add the line in red into the runtime section or to create a config file if there is none.