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I have installed RHEL5.4 on HP laptop without any problem.
But when I am booting with it, I end up with GUI not working though CLI is woking perfectly. Getting error saying Touch Pad mouse not configured correctly.
You haven't said whether you've actually bought Red Hat. It's quite capable of supporting modern hardware, but only if you update it and you can't update a demo. As I said before, if you've paid, complain to Red Hat. If you haven't, then don't use it.