Found the cure!!!!
It was the PXE entry in the menu. The guide somehow doesnt let me get past the login prompt.
The note at the bottom of the guide gave me some clue!!
NOTE2: Remember to check the boot parameters in syslinux/syslinux.cfg
I just copied and renamed syslinux.cfg then modified it with my server address.
copied this one from the guide:
kernel vmlinuz1
append initrd=initrd1.img boot=live union=aufs noswap noprompt vga=788 fetch=http://$webserverIP/filesystem.squashfs
this one worked:
kernel vmlinuz1
append initrd=initrd1.img boot=live config noswap noprompt fetch=http://myserver.com/gparted/filesystem.squashfs nosplash