Thanks for you input. I did installation in the sequence you mentioned but it didn't help. With a help of apps at NI and being on the phone for soooo long, he found out that two dll files called ivi_Switch.dll and ivi_switch_32.dll were listed in VXIPNP\WINNT\bin folder as well as C:\programfiles\ivi\bin. By removing those dll from VXIPNP folder fixed the problem.
Bottom line is - leave the dll fils in C:\programfiles\ivi\bin as it is!