I have made the changes as suggested by Jonathan -
----changes ----
e['REMOTE_ADDR'] to e.get('REMOTE_ADDR', 'localhost'),
-------------------

now it does not give me the REMOTE_ADDR Error. It shows the below
text..

-bash-3.2$ ./dispatch.fcgi
WSGIServer: missing FastCGI param REQUEST_METHOD required by WSGI!
WSGIServer: missing FastCGI param SERVER_NAME required by WSGI!
WSGIServer: missing FastCGI param SERVER_PORT required by WSGI!
WSGIServer: missing FastCGI param SERVER_PROTOCOL required by WSGI!
Status: 303 SEE OTHER
Content-Type: text/html; charset=UTF-8
Location: /web2py/welcome/default/index
Content-Length: 73

You are being redirected <a href="/web2py/welcome/default/index">here</
a>-bash-3.2$
---

I am confused what url would I need to access. Also does the above
output mean, It is working now?
Can we ignore Status 303 SEE OTHER Error ?

My public_html structure is as follows

$HOME/<username>
         |------->public_html
                       |-----> .htaccess
                       |-----> dispatch.fcgi
                       |-----> <domain.com> directory
                                        |-----> .htaccess
                                        |-----> dispatch.fcgi
                                        |-----> web2py directory
                                                |-----> All       files & 
folders +                                             dispatch.fcgi &
                                                .htaccess


Please suggest -

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