Hey guys, some good news finally!!! I tried to flash my device and Aloha! It worked. I've been using my N900 for 3 hours now. So far no reboots, working absolutely fine. So I guess the issue for me was with the Maemo OS. Anyone facing this continuous reboot issue, try to follow the instructions given in http://wiki.maemo.org/Updating_the_tablet_firmware to flash the device.
Thanks to everyone (especially bsving) who had the patience to answer each of my questions.