Hi,
I have an acer aspire 4710Z and have Windows XP professional installed in it.
Every time I insert the pen drive my system configuarations get altered. IE Microsoft office's dlls get corrupted.

This has started happening only recently. Also the pendrive does not get safely removed.
Every time I give the command.. it says Generic volume cannot be deleted. Try later, this happens even when no other program is running.

ANd this is happening only in my laptop, no one else's.
I'm not able to work at all because of this.. help me.
Should I buy another pen drive or the problem is something else?

This is hard to answer, I have never heard of something like this happening before.
The first thing you should do is try another pen drive in your PC, e.g a friends pen drive etc just to see if the same thing happens with theirs. If it doesn't then it is likely to be a problem with the pen drive itself and therefore you would need to buy another. If it does happen then it is likely to be a problem with the PC or USB port itself.
If you get into this situation, you will need to take your PC to a repair shop or send it back to the manufactures if it is still within guarantee.