Installed the 2007 Office System Driver: Data Connectivity Components as per the URL below and it started working.
In our case we cannot view a list in Datasheet view after we installed the 64-bit version of Office 2010
By design the data sheet view is implemented as an ActiveX component called Access Web Datasheet.
If you are on the server and try to test this functionality this may not work due to unavailability of office clients on server.
Installing office clients on servers usually seems unnecessary and potentially hazardous.
Just install Microsoft provided free Access Run-time installer, as per the link provided above, which is enough to enable Access Web Datasheet functionality.