Paul, Please understand the steps of my problem and worry :
1. First when I installed the Gmail on My phone, it only asked the one password given under the Verfication Step where a code is generated and given from Gmail. (which is not the password put while opening the mail). After I did that it started working fine....
2. After that a few hours later, I changed the password from my computer and to my surprise the phone never asked anything ans it still kept working fine with all the mails coming.
3. Now in that case even if I change the password again from the system, that is of no use cause the phone mail will still keep on working.
4. Actually thats what is scary. Coz it means that if I lose my phone then the Gmail will keep on working on the handset even if I change my password from the system.