JoeJack951/Operator, Thank you very much. I misunderstood E-type. This derailleur is just attached to plate on tube. I have read parktool and biketutor.
http://picasaweb.google.com/lh/photo/s7ca4zTCs5WI0QGOohyiMw?feat=directlink
http://picasaweb.google.com/lh/photo/quEgnI405vuPuhusyz1xsg?feat=directlink
1. The groove in the second photo(34).. If the ring were circular the chain just stays fine within the groove but with the Q-rings, the chain moves more than the groove's breadth and rubs against the cage.
2. The bike is setup for 3x10.

I feel I should give a try with 2x10.
Thanks for your replies.