Hello Shiv,
I'll better illustrate what I mean.
If you move a bone in
setup mode
the mesh will use that position as new starting point. Therefore it will not move while weighting it unless you manually move the bone.
On the contrary, if you don't move the bones in setup mode, but you create a new animation in
animate mode
and then move a bone and key it, when you adjust the weights in animate mode, the mesh points will move depending on the influence of the keyed bone on them, like this:
Is the second gif the behaviour you were looking for?(:
