This was a nice piece of R&D work i ever did. Though it was very complicated at the begining (since i am not from any electronics or tele communication background), after lots of searching & reading & changing settings (trail and error) it WORKED!!! EUREKA 
Finally i didnt knew a small thing as [color=red]Line-In-Use Voltage[/color] under International Control section of PSTN LINE can turn to a nightmare 
Almost the default factory setting will work for all. There are actually a few settings we have to do.
For India (Bangalore), these are the setting i did. I am not sure whether it will work for any other state/country.
(i created an excel doc to illustrate this, and incase anybody is having a hard time configuring then just mail me at [color=red]sanjith@optis.co.in[/color] and i’ll send you that document. I am no expert in asterisk, but this might save little time for you
)
SIP.CONF
;for outgoing calls
[pstn]
type=friend
secret=999
qualify=yes
port=5180
nat=never
host=dynamic
dtmfmode=rfc2833
context=incoming
canreinvite=no
callerid=PSTN <199>
disallow=all
allow=ulaw
insecure=very
incominglimit=1
EXTENSION.CONF
[incoming]
;Dial other office Extensions
exten => _[1-3]X,1,Wait(2)
exten => _[1-3]X,n,Dial(SIP/pstn/${EXTEN},r)
exten => _[1-3]X,n,Congestion
;Dial 0 and then outisde number
exten => 0,1,Dial(SIP/pstn/0,90,tT)
exten => _ZZ.,1,Wait(2)
exten => _ZZ.,n,Dial(SIP/pstn/${EXTEN},r)
exten => _ZZ.,n,Congestion
;incoming call from pstn fwd to 100
exten => 99,1,SetMusicOnHold(moh)
exten => 99,n,Answer()
exten => 99,n,Dial(SIP/100,tTm)
exten => 99,n,Hangup()
SPA CONFIGURATION
Ref: vbuzzer.com/forum/viewtopic.php?t=237
I RESET ADPATER
1 Plug electric cable P2 and then the cable to phone P4
2 Switch on the adapter
3 Take the phone and then press **** to get adpater assistant
4 Press 73738#
5 Press 1 and hangup the phone
6 Switch off the adapter and then trun it back on
7 Press **** followed by 110#
8 You should get the voice replying 0.0.0.0 as IP address
9 Hangup the phone
II IP ADDRSS SETTING
1 Take the phone and then press **** to get adpater assistant
2 Press 101#, then 0# and save the value by pressing 1
this will disable dhcp
3 Press 111# and then enter the IP adress as 192168048#
and save the value by pressing 1
this will set the IP address
4 Press 131# and then enter the Gateway adress as 19216801#
and save the value by pressing 1
this will set the gateway address
5 Press 121# and then enter the netmask adress as 255255255*0#
and save the value by pressing 1
this will set the netmask address
6 Switch off the adapter and then trun it back on
7 Press **** followed by 110#
8 You should get the voice replying 192.168.0.48 as IP address
9 Hangup the phone
III OTHER SETTINGS
1 Now that the IP address of the adpater has been set,
take your browser and type 192.168.0.48
2 In the right hand side, top menu click Admin Login
3 In the right hand side, top menu click Advanced
4 The link takes you to the page where rest of the settings has to be done
SETTINGS THRU WEB PAGE
SYSTEM
Optional Network Configuration
Domain: yourdomain //replace it with your network domain
Primary DNS: xxx.xxx.xxx.xxx //replace it with your network dns ip
Secondary DNS: xxx.xxx.xxx.xxx //replace it with your network dns ip
Primary NTP Server: pool.ntp.org
Secondary NTP Server: pool.ntp.org
REGIONAL
Miscellaneous
Set Local Date (mm/dd): 09/18/2009
Set Local Time (HH/mm): 10/05
Time Zone: GMT+05:30
PSTN LINE
SIP Settings
SIP Port: 5180
Proxy and Registration
Proxy: xxx.xxx.xxx.xxx //replace it with your asterisk server ip
Register Expires: 60
Subscriber Information
User ID: pstn
Password: 999
Dial Plans
Dial Plan 8: (S0<:99@192.168.0.51:5060>)
PSTN-To-VoIP Gateway Setup
PSTN Ring Thru Line 1: no
PSTN Caller Default DP: 8
PSTN Disconnect Detection
Detect CPC: Yes
Detect Polarity Reversal: Yes
Detect PSTN Long Silence: Yes
Detect VoIP Long Silence: Yes
PSTN Long Silence Duration: 1
VoIP Long Silence Duration: 1
PSTN Silence Threshold: high
Min CPC Duration: 0.01
Disconnect Tone: 400@-30,400@-30; 2(0.75/0.75/1+2)
International Control
Line-In-Use Voltage: 15
Note:
The above mentioned values are the only things i changed as part of settings, remaining i kept it as factory settings. With this settings i can make outgoing calls as well as recieve incoming calls thru pstn.
Hope this was helpful.
Regards
Sanju