After switching to a new handset, I called the airtel customer care as the Airtel Live settings (which had been picked up automatically) didn't work with applications like Opera or GMail. I was told that Airtel Live didn't support third party applications. Funny that they worked fine with my previous phone.
Anyway, I was told that Airtel has a "Mobile Office" scheme for usage with third party apps, and surprisingly it didn't have a monthly rental (AFAIK, Mobile Office had been a Rs 199/month GRPS plan). The only charges seem to be Rs 0.3 / 50KB, which works out less than Airtel Live.
The activation steps are:
1. Dial *567*1# for activation.
2. Respond with "1" for Mobile Office.
3. Wait for the new settings to be received.
All is fine for now, with GMail and Opera running just fine. But what surprises me is - why does Airtel have two independent schemes for GPRS access, with one being clearly superior AND more economical. I'll update this post if any "hidden" charges come into play. If nothing like that shows up, I guess all Airtel Live users need to switch to Mobile Office.