Although quite a few people has explain your above questions I'll go through it anyway.
Ok I am a complete noob(actually frustrated user) in linux..have installed it many times but failed to use it..sometimes sound sometimes some display prob..now my old laptop is hanging even after many format..it has 512 MB RAM only .....i had tried ubuntu but it had some prob wid video card so dumped it .....wanna try linux again (my first crush will not die despite so many futile attempts...tell me that version of linux which can
Lesson1 of Linux. You don;t become better at it at dropping a distro each time you face an error. Whether it be Ubuntu , Suse or whatever you might face an error. The only reason you don't mind errors in Windows is because you know how to troubleshoot them.
In the FAQ's above it contains links to several threads which explain what distro to use based on your usage. You could check one of those perhaps. Since you are still new to Linux I would recommend Ubuntu or Mint. I have heard Mandriva is also nice but have never had the chance to sue it recently.
1. easily identify Acer 5500 notebook's video card ATI X700
It is going to be a bit of a hassle to configure the display card since its an Ati I would guess. but I think you should be able to do the same sicne Acer laptops come out with Linpus Linux with the same configured.
2. can run super smooth n fast
This is based on each users perception. I use Arch Linux and its quite fast. When I was using Ubuntu I felt that it was fast as well. how far are you willing to go for that extra performance? As a beginner I wouldn't recommend you down one of those paths anyway.
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3. has all the window double click features ..just dbl clik and install software..no command line maatha pachhi .......
This is a huge Myth. To install any software in Linux as long as it is from the Repositories is basically a single click unlike Windows which requires you to click it multiple times. The only time you might run into a problem is if you use some software which isn't already in the distro's repositories and hence might require you to compile stuff or download deb files and install it. Also FYI the command prompt is one of the best features of Linux . In time after usage you will see what I'm talking about.
4. can play movies in avi and music in mp3
Stick with Mint or Sabayon they come with all the codecs downloaded and installed.
5. can dload movies by mutorrent
Each distro has a torrent client on it. Well at least the ones I have used do. As for mutorrent I'm not sure what it is or whether it is legal so I'm not going to go there.
6. can install yahoo messenger with voice chat
I believe Yahoo messenger works with Wine but Im not sure since I use alternatives like Pidgin .
7. Word docs compatible wid MS office
OpenOffice can easily open Word Documents I believe they can save it as a word document as well.
so suggest a linux version if there is any that fulfills my above requirements
I would recommend either Mint or Ubuntu.
If not I will stick to win xp
Do not change your OS because someone else does . However if you feel the thrill of learning or trying out something new then go ahead and give it a whirl . Else you will just regret the transition .