Rajesh,
There are a couple of things I am noticing about this.

>These are the ones which I installed. Is there anything missing or can there be a different version available? I reinstalled everything and added the references again (from Website--> Add Reference and also from bin --> right click Add reference), but still getting the same error.
>
>Web.config reference (removed the greater than/lessthan symbols) given below:
>add assembly="Mere Mortals Framework 2005 Infragistics Web Controls, Version=2.4.0.0, Culture=neutral, PublicKeyToken=F9B5AAF729361A44"
>
>And this is refering to : "C:\Program Files\Mere Mortals .NET Framework 2005\Third Party Components\Infragistics Windows Controls\Mere Mortals Framework 2005 Infragistics Windows Controls.dll"

You are showing a reference added for MM Infragistics Web Controls, but the line right above here says Infragistics Windows Controls. Just make sure you have added a reference to the Web Controls if that is what you are using. Also, since you are adding from the bin folder as well, you might try deleting all of them from the bin folder. This is where I got in trouble before. Then in solution explorer under references it should be listed. If you click on it to highlight the reference and then go to the property sheet you can set the property for "Copy Local" to true and this will make it update to the bin folder. If there is a old copy in the bin folder, and you have updated the reference doesn't match.

>Build Error:
>"D:\QIS\App\QISPortal\Web.Config(35): Build (web): Could not load file or assembly 'Mere Mortals Framework 2005 Infragistics Web Controls, Version=2.4.0.0, Culture=neutral, PublicKeyToken=f9b5aaf729361a44' or one of its dependencies. The located assembly's manifest definition does not match the assembly reference. (Exception from HRESULT: 0x80131040)"
>
>Installations:
>MM .NET 2.4 (for VS .NET 2005)
>MM .NET Documentation
>MM .NET 2005 Infragistics Windows Controls (2007 Volume 3 for VS 2005)
>MM .NET 2005 Infragistics Web Controls (2007 Volume 3 for VS 2005)

Now, I don't see that you listed you have intsalled the actual Infragistics Controls from Infragistics. Can you confirm that you have the controls installed also?
Tim