Ok, got it. So, here is what happened... 

1) checking md5 checksum is very important. First when I installed maven, I
assumed the checksums would be correct and without md5 I installed maven.
First mistake. 
2) Initial installation created a repository /.m2, but there was no
repository directory under .m2, strange. 

So, I downloaded a fresh install of maven 2.2.1, made sure the checksums
matched. Then, I removed .m2 and created a fresh directory .m2 and then on
it worked fine. 
 
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