Thank you for a great and detailed reply, I am sorry that I could not test/reply sooner.
I have tried your suggestion and checked is my printer port configured with LPR byte Counting - it is not.
I have also downloaded an EFI DocuColor 242/253/260 driver, removed the old port and installed it instead of the older Xerox.com one as suggested. The applications no longer crash and they display the printer box properly, only this time, and this might be because of printer configuration, my DocuColor 250 draws two papers from the bypass for duplex printing (one copy) and jams.
Also, some times it prints something on one part of the paper and from my observation it is trying to print an A4 paper but it draws an A3 paper.
I will explore this more and let you know tomorrow what happened.
Thanks once again.
[Edit]
If it means anything, the EFI server on this printer is Version 1.0 as the driver reports. Should the server be updated?
Also one more thing, the old driver worked under Windows 7 32bit with out problems for a long time, I am starting to think that i might fix the problem if my system were not an 64bit one? (But that is a problem on its own due to all the applications and configuration i would need to do if i reinstall)