thanks a lot for the help, after reading your reply I went on to find a solution for the problem. It turned out that the path to my php.ini was missing and the server was ponting to C:/Windows directory where php.ini was never saved.
So, in order to update the path for the server to find php.ini I inserted a line in the apache configuration file httpd.conf and that line is as follow:
PHPIniDir "C:/php/"
There was it everything is perfect now and GD2 is also working, its a strange behaviour that even the server was not ablt to find the files path as the installation was manual, but php was still working at that time aswell except the extensions though.
Now that it has been sorted, I will be using ti for my flash gallery which needs it to creat thumbs.
Thanks a lot.