I have Hadoop 1.0.4 running on a single node cluster set up on my Ubuntu machine.
I did the following steps to download and install the hive release
I resolved the problem myself but not sure what exactly happened.
By following the process I mentioned in my original question, I created the $HADOOP_HOME/hive but it was giving me a missing jar error.
So, what I did was: I downloaded hive-0.10.0.tar.gz and extracted it under $HADOOP_HOME. So the newly created folder was $HADOOP_HOME/hive-0.10.0.
I copied the entire lot of jars under $HADOOP_HOME/hive-0.10.0/lib to $HADOOP_HOME/hive/lib and when I executed next,
$HADOOP_HOME/hive> bin/hive
It worked! Please note my $HIVE_HOME=$HADOOP_HOME/hive and $HIVE_HOME/bin is added to path. Hope this helps somebody facing similar problem.