Thanks Michael.
It turns out that the user parameters are available in DynamicBlockReferenceCollection and all you have to do is to change them.
So that solves the fundamental issue. Now on to the next question.
Is there a way to extract block names and thumbnails from any dwg file (not the current file) ... a la design center.
Thanks
PS:
Actually I got misguided by Kean's statement "The Parametric Drawing API is available in ObjectARX only, and exposes the framework for the feature at a very low level. This makes the API very flexible, but does make it quite complex to use." in his "The new APIs in AutoCAD 2010 - Part 2"
Looks like may be he was referring to "making" the parametric drawing in code, not using the dynamic blocks.