A user posted a problem in the newsgroup for which he himself suggested a solution that worked for him. I thought I would post it here. Some one will find it useful.
Problem: InfoPath form should inherit from a base content type. If a form is deployed using standard publishing functionality, InfoPath inherits from the correct content type but when the form is deployed through a feature, the form opens in the client and not in the browser.
Suggested Solution: Content type has a property called "RequireClientRenderingOnNew" which is set to true by default. If you set it to false, the problem will be resolved.