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I have 3rd position for allinanchor:kw1 kw2 and allintitle:kw1 kw2 and 4th for allintext:kw1 kw2 for my site but for kw1 kw2 I am not even in the top 400!
What am I doing wrong and how am i supposed to be using these options in google for seo?
In other words, the allin's show a lot more penalized sites. In your case, if your domain is less than a year old, likely it is sandboxed like tons of other sites, and there is nothing to do about that. If it is a pre-2003 site, likely it is being penalized or otherwise dramatically devalued for one reson or another, and there are a bottomless pit of reasons for that for you to explore.
The domain was registered 31 Jan 2004 - From what I've read here I thought that would have been early enough to avoid the sandbox.
The content on the site had been on another domain since around July 2003 - would this have any effect?