I am having one pakage which execute one DOS batch file to operate a FTP task(Pulling files). Its working fine with SSIS. When Scheduling with SQLSERVER Agent Jobs its not working and status showing as "in progress". tried with different user IDs like "sa", Local User Account etc.

Did you cheked the permissions of the Account the SQL Server Agent use? All Jobs started with die Agent uses that Acount per default. Otherwise create a Proxy-Account with all needed permissions and start the SSIS with that. When you start the dtsx from BIDS it will use your permissions.

The SQL Server Agent(services.msc) is running using "Local Services". Changed to the server's Login User ID and the job executed fine. But what will happen if the server login password changed. I have to manually change the password..Not seems as good approach. can you pls let me know how to use SQL Proxy Account for this problem.

See the following links Creating SQL Server Agent Proxies Job Owner,SQL Agent Account, Proxy accounts Sergei