Many would have googled for the possible issues regarding to the same. Even, I spent few hours together on to this idiotic stuff. Not only hours, but also few bucks in buying new keyboards after reading some mis-guiding blogs. It suggested me to buy the new MICROSOFT Keyboard to resolve this.
Finally, I learnt that this is not the issue. Its the fix problem with “Adobe Photoshop CS2” application which I have installed in my machine. When I close this application ESC key works fine.
Close Photoshop CS2 or Restart the Machine! Issue resolved.