I solved this one myself. I tried replacing the brand new usb cable with an old one from a mobile phone and that fixed the problem. Who would have thought a new cable would be faulty?
Another issue I had was with the downloaded opl software. The check on the version told me the software on my atom was a year younger than the downloaded software. This caused many issues as I was unable to set up the quadcopter esc's.
So I started everything from scratch, updated the firmware and all came good. The updated firmware is now consistent with the GCS requirements. But this was rather a lot for a newbie to comprehend.
The final issue I have is with the transmitter wizard. It does not respond to the throttle setup and I cannot make further progress. All in all I seem to have wasted about 10 hours of my valuable time. And being a newbie you always wonder if it is something you have done wrong despite the endless checks.