srinisub,
1) Can you please share your installation details with us from MyEclipse > Installation Summary > Installation Details?
2) Do you see any errors which are of interest logged in the .log file which is located at <workspace dir>/.metadata folder? If yes then paste them here for me.
3) Can you give us steps in detail to replicate it at our end?
Here is a tutorial which explains in detail about Hibernate reverse engineering. Can you go through it step by step and check if the reverse engineering works?
http://www.myeclipseide.com/documentation/quickstarts/hibernateintroduction/
Let us know how it works for you.