problem with the latest samsung kies
its all problem with the latest samsung kies. I think I was using Kies_18.104.22.16864_10_1.exe
With latest samung kies, the drivers are not getting installed properly.
Steps to correct this problem
1) Uninstall samsung kies
2) Reboot system
3) Install an old version of kies - I used Kies_22.214.171.12424_17_6
4) Connect your S2
5) Old kies will install the drivers properly for your s2
6) Now with the mobile connected, update kies from kies itself.
All works after that.