sometime after starting everything hangs nothing responds

Which graphic card do you have ? Everything is frozen right: mouse is not moving, keyboard not responding?

Right everything is frozen! no movement no response. But that happens after a minute or two (today it occured when I was loading OpenOffice forcing me to reboot after which it hanged while I was browsing through the screen savers).
Here is report from Intel GMR
Intel(R) Graphics Media Accelerator Driver Report

Report Date: 10/13/2010
Report Time[hr:mm:ss]: 05:10:36
Driver Version: 6.14.10.4906
Operating System: Windows XP* Professional, Service Pack 3 (5.1.2600)
Default Language: English
DirectX* Version: 9.0
Physical Memory: 2039 MB
Minimum Graphics Memory: 8 MB
Maximum Graphics Memory: 128 MB
Graphics Memory in Use: 9 MB
Processor: x86 family 6 Model 15 Stepping 13
Processor Speed: 1995 MHZ
Vendor ID: 8086
Device ID: 2772
Device Revision: 02

* Accelerator Information *

Accelerator in Use: Intel(R) 82945G Express Chipset Family
Video BIOS: 1217
Current Graphics Mode: 1280 by 720 True Color (60 Hz)

* Devices Connected to the Graphics Accelerator *

Active Monitors: 1

* Monitor *

Monitor Name: Plug and Play Monitor
Display Type: Analog
Gamma Value: 2.20
DDC2 Protocol: Supported
Maximum Image Size: Horizontal: 14.0 inches
   Vertical: 8.0 inches
Monitor Supported Modes:
640 by 480 (60 Hz)
640 by 480 (67 Hz)
640 by 480 (72 Hz)
640 by 480 (75 Hz)
720 by 400 (70 Hz)
800 by 600 (56 Hz)
800 by 600 (60 Hz)
800 by 600 (72 Hz)
800 by 600 (75 Hz)
832 by 624 (75 Hz)
1024 by 768 (60 Hz)
1024 by 768 (70 Hz)
1024 by 768 (75 Hz)
1280 by 720 (60 Hz)
Display Power Management Support:
 Standby Mode: Not Supported
 Suspend Mode: Not Supported
 Active Off Mode: Supported

* Other names and brands are the property of their respective owners.

I'm not 100% sure, but it looks related to the "Infamous Intel Lucid Drivers", I saw numerous people having problems with an intel card in Lucid, so here is what I think:

-is it a server ? Or a computer requiring to stick with a Long Term Service version ? (meaning = you stay with 10.04 during 2 years) Or do you want to always have the newest version ?

-if you are ok to upgrade, you should try to update to Maverick. I didn't have a single freeze in Maverick since last week, I had at least one a day before with Lucid...

It never allows me to stay with ubuntu for few minutes so I haven't made network connections etc.
One thing I am pretty sure is that this is not a problem with graphic card. Reason: when it locks everything locks not just screen, if I press the caps or num lock it would have no effect on LED indicators, for example.

Well, when Windows has a driver problem, you get the blue screen of death, everything is frozen, right ? Even if Linux is not windows, I think a serious driver problem could lead to the same result...

Can you burn a LiveCD of Maverick on another computer? Then try on your computer? This way you will know if Maverick can solve your problem. Then it doesn't matter if it's the graphic card or something else, right ?

If it's working and you are OK to upgrade:
-if it's a brand new Ubuntu with no documents in it, maybe you can simply use the LiveCD to reinstall everything?
-if you have documents and need to upgrade, you can try to connect to the internet using a wire, and use the recovery mode, I'm quite sure you can upgrade from there.

So, I tried Maverick in live environment and to my dismay that 'freeze' doesn't spare it too!
But, one thing I noticed in both 10.04 and 10.10 is that if I leave the computer on itself nothing would happen, it is only when I try to do something on it that it freezes. Further, I tried Maverick slowly that is maintaining a decent time interval between each input (mouse clicks) while using it lightly (just browsing various screensavers and other fatures, I didn't started some normal application like office) and found that my session lasted much more.

Sounds like an input problem.

Try another mouse.
Is your mouse PS2 or USB by the way ?

Isn't all this very much discouraging experience for a new user. That's why I see window (which I hate) is so dominating!
This may force me to consider fedora, it is more famous in my location.

Remember, the hardest part is always the start: to install an OS isn't always easy. Windows comes preinstalled, so of course, it looks easier... Your case is not the average one, but I can understand your frustration. To change to another OS needs time. One cannot say "ok, let me try for 2 days, then I will decide". It took me weeks to really feel comfortable with it. And now, it's the opposite: when I use XP, I feel frustrated sometimes because I have my habits in Ubuntu.

Then of course, I don't say you should keep ubuntu. Maybe XP is what is the best compromise for you. But I think it's worth trying to fix those initial problems to really see what the system can bring you.

And I'm really not sure that Fedora will be easier. Maybe you will not have this hardware problem, but it's not as user friendly as Ubuntu honestly. I try different systems often to compare and Fedora is nice, but there are some very very frustrating problems with it. Just to install the support for MP3 is too complicated to me.

It,s not USB, it,s PS/2.

Can you try a USB mouse? You are not the first one I see having a problem with a PS2 mouse... So if you have a free USB plug, that's really worth a try :)

Not now. It seems amazing that such a popular OS for PS2. Moreover, I see that ubuntu has problems with USB modems but needs PS2 mouse. What more hardware I need to change before getting good response- I wonder!

Doesn't any body know real problem (or a way to discover it)?