networknaz,
While I haven't had much experience with the 3500 HP series, the theory behind Inter-Vlan routing is the same for all vendors, so here's what I'd suggest you check/try:
1) Start off with a clean configuration for both switches
2) Configure your vlans for each switch & assign them an IP address for each vlan
3) Enable VTP and configure one switch as the master VTP server to allow propagation of all vlans to all network switches
4) Create a trunk link between the two switches using 802.1q
5) Enable ip routing on your master 'root' switch
6) Assign each switch port to the appropriate vlan
7) Set each workstation's default gateway to the ip address of your root switch interface that's in same vlan as the workstation.
If you try all the above and still can't get the routing happening, let us know.
As a last note, you don't need RIP enabled in order for Inter-Vlan routing to work, so I'd suggest you keep things a simple as possible and avoid it.
You might also want to check that your switch image supports Inter-Vlan routing. With Cisco, a switch might support these features, you need the appropriate software image (IOS) in order to enable them, I'm not sure if the same applies with HP's switches.
Cheers,
