Thanks for your reply.
Sorry for the worng screen shot. I am atttaching the correct screen shot now.
Right now i ma trying to record the tests using WEB UI Test Studio, devlopement edition.
The information in the article http://www.telerik.com/automated-testing-tools/support/kb/unable-to-launch-recorder.aspx
refer the screen shot of WEB UI Test Studio QA Edition.
Wrt to IE and other browser setting, i am using IE 8.0 and done with necessary browser settings, but the problem still occurs.