VS2010 command prompt gives error: Cannot determine the location of the VS Common Tools folder

I have installed VS2010. The installation creates the shortcut for VS2010 command prompt but when I open up the command prompt I get the error:

Cannot determine the location of the VS Common Tools folder.

I checked the environment variable VS100COMNTOOLS and it has value: C:\Program Files\Microsoft Visual Studio 10.0\Common7\Tools\ and the registry for HKEY_local_Machine\Software\Microsoft\Visual Studio\SxS\VS7 is set to: C:\Program Files\Microsoft Visual Studio 10.0\.

I checked the VSvars32.bat and tried to add echo to find till where it proceeds. It fails at this command:

@call :GetVSCommonToolsDirHelper32 HKLM > nul 2>&1