I don't know if this is the solution or workaround; but after doing the 
following i was able to "save my account settings":
after receiving the note from Led Shark; i tried to find the accounts.xml in my 
~/.purple directory. I could not find this file in that directory. On further 
checking I noticed that the owner and group of the .purple directory is "root" 
which is why system was not able to save accounts.xml in this directory. I 
changed the owner of the directory to my userid and recreated account settings. 
this time i could find the accounts.xml file in this directory. 
to be doubly sure; i re-booted and ...wow..  the account settings were saved!
....
i am not sure if the .purple directory is "supposed" to have owner as root but 
i guess since the directory in the $HOME directory of my userid; my userid 
should be the owner.

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Account settings not saved
https://bugs.launchpad.net/bugs/331863
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