well, I am using Xampp control panel version 1.7.7. Yes, actually now that I have disabled the only mysql service from windows service manager, when I try to start mysql from Xampp control panel I get the error mentioned in my previous response.
I even tried to start the mysql_start.bat file and it does not do much except for tell me that the service is trying to start.
The problem is that when I first separately installed mysql for RoR, it created a service under "mysql" in windows service manager. Later, when I installed Xampp it made another mysql installation which is using the "mysql" service that was initially installed. So, basically there are two installations of mysql, but only one service. And Xampp control panel is sort of linked to the only mysql service that is installed(which is linked with the first mysql installation). I know, it sounds all complicated but it is what it is
I guess, if there is a way to create a new mysql service in windows service manager which actually points to the mysqld>my.ini file from Xampp's mysql installation and link it to Xampp control panel somehow, the problem could be fixed.
Of course you can correct me if I'm wrong
do let me know if its possible, though..