after restarting the device when i plug in the headset indicator appears but for the first time only. so i tried another headphone (sennheiser cx300) and it worked well everytime, i tried nokia headset on the other devices as well and it worked well too. what's the problem with them that came out of nowhere suddenly?

Did you manage to sort this out. I am having the same problem. The media player contrinues to use the speakers when the haeadphones are plugged in, unless I plug them in through a splitter. In which case it works fine.

Essentially, the headset you have is damaged.

The Nokia headset has four connections where normal headsets have 2 or 3. The N900 knows all for connections are present but does not get a signal from all 4 so will not recognise it. When a normal headset is put is, it gets a signal from all 3 connections so recognises it and you get sound which is why it works when put into a splitter.

I had the same issue not long after getting my N900. I actually got the headset wrapped around a chair when I stood up and they stopped working. Normal headphones worked and the Nokia headset worked in my mp3 player, just not with the N900. After searching here for a bit I found that this is quite a common problem and that it is the headset that is to blame.

As I had it for less than a week I went back to the shop telling them it was faulty. They claimed it was a software fault at first but got a headset from another N900 and they worked fine. The newer pair have since stopped working so I have given up getting a new pair as I know a few months down the line I will break them again!