Vista - Closing the lid does not enter hibernate or sleep mode

I've bought Dell XPS M 1530 recently. Earlier with bios version A_05 my
notebook didnot detect wireless network if it became available while the
computer was already On. The computer had to be waking up or restarting in
the presence of network and then only it registered it.
The Dell technician downloaded the latest bios (version A_07) and the
wireless network problem got corrected.
But the new problem thats comeup now is that closing the lid doesnt put the
computer to sleep. I checked in the power options, thats correctly
configured. Even changed it to hibernate when i close lid. That doesnt work
either.

One more thing i must add - that it's not like my computer doesnt get to
know at all that the lid is closed. When i open the lid, everything is ON but
the mouse arrow behaves 'drunk' for a while before becoming normal. Can
someone help.

AK