Liclipse/Eclipse: setup debugging environment for a django project alongwith its virtualenv
[Update]
The error got resolved after setting python environment  via

Right Click on Project in Project Explorer -> PyDev -> Source PyDev Project Config
Project Explorer -> Properties -> PyDev Interpreter
Project Explorer -> Properties -> PyDev PYTHONPATH
add exact path within virtualenv where the python site-packages are installed 

After this, one also needs to fill two fields in PyDev - Django

Django manage.py = your manage.py file
Django settings module = settings.local or whichever is your settings file

Hope it helps.
I am able to run the django server from eclipse but still not able to make the code stop at breakpoint. :(
I am looking for a clearly written set of steps to import an existing django project stored in a GIT repository into Liclipse (Eclipse configured for python) configured using virtualenv and running successfully.
I used File->Import to import an existing project from its top level directory /home/comiventor/ProjectXYZ/ containing .git
Now when I run ProjectXYZ->Django-> Sync DB (manage.py syncdb)
It says "pydev nature is not properly set"
I could not derive much help on this error from any other source. :(
[Update]
I am able to run the django server from eclipse (steps in my answer below) but still not able to make the code stop at breakpoint. :(