Hi sarala,
In the old days, a fixed-width design was popular, because it was easy to do. Then "liquid designs" - that scale with the browser - became popular. But nowadays, with screen resolutions of more than 2000 pixels wide getting more common, it looks like liquid designs with a maximum width are gaining in popularity.
For items like menus and buttons, I would use a fixed width. Then for the main layout you can choose either a fixed width or a fluid layout. This might give you some ideas:
http://www.google.com/#hl=en&source=...10401dfb0a78c2
Hope this helps,
Imar