Do this: From your home-screen tap menu - settings - applications - manage applications - all -- then market, tap on force stop, clear cache and/or data. Open up market to see if the problem still persists.
Ps. For additional tips & tricks tap on the link in my signature.
Tried that, its not working, also when I do factory reset, it does not delete any downloaded apps etc, I tried format sd card and it formats but the data is still there. I uninstalled the application and they are back when I reboot.
Seems like hardware issue.
Is there a way to force harware reset? I tried power button and volume down, also tried dialling *2767*3855#, nothing is working