Hi Ajay
So, in heeding what you said and decided to almost start from scratch, I uninstalled the BOE Xi 3.1 and removed all relevant mentions of BusinessObjects in the registry (including any Apache mentions)... installed 2008 Sql Server Express 32bit, running side by side with the 64 bit.
During re-installation of the BOE Xi 3.1, I tried pointing to the 32bit (with newly created DB for CMS) and I get the following error message: The specified DSN contains an architecture mismatch between the Driver and Application... SO AFTER SEVERAL FRUSTRATING TRIES, I decided to point back to the 64bit SQL server DB and it accepted and allowed me to continue! I must be missing something?