I think you will find answers to your questions here-
You need Multicast BGP on all your routers as your unicast and multicast topology are not congruant. Then configuring an MSDP session between both RPs should work as the MSDP peer will be seen as an eBGP peer so the first AS of the best BGP path to join the RP originating the SA must match the AS the eBGP peer sending the SA (which is the same router in your case). Don forget to build your MSDP peering with the same addresses used for BGP peering.
For more information about the MSDP SA RPF check rules, please refer to chapter 10 of the RFC-3618. I agree this is usually the most complex part to understand about MSDP.
thanks for your valuable pointers.
i had gone through the RFC but didnt understand enough to relate it to this post. Now I hv understood the theory better by making this work.
Amit - thnks for your post too, though it wasnt specifically what i was looking for..my confusion was related to non-RP doing MSDP.