Please consult the following Wikipedia article:

http://en.wikipedia.org/wiki/Quantum_entanglement

Sir, I have come across some articles which claim that all systems are entangled(Reason for this argument given is that at time of BIG BANG everything was entangled) and that space is a construct/object that gives us illusion of "separability" of two quantum systems. How do we account for this? If Space is an illusion;then what about Space time fabric? Please give me some good and reliable articles on this thing!

Dear Hrushikesh, you will have to cite at least one of the articles to which you refer in order to make an informed discussion on my part possible. But aside from this, your actual question was about "Quantum entanglement", which is clearly specified in the Wikipedia article I referred you to earlier. Clearly, at the level of definition not all states are entangled (one can explicitly construct many states that demonstrably are not entangled). The question as to whether all states are entangled (or the assertion that all states are entangled) is a separate question, unrelated to your original question. I can on general grounds only state that there are some who are in the habit of taking everything out of their scientific context and present things in such light at to imply that with the exception of them the rest of the world were in error. The statement that you quote, implies that systems had infinite memory in time, which is not the case, and if it is the case, the remnant memories are so small as to have completely sunk below the ambient noise level. In any case, in laboratory experiments specific entangled states are created and the nature of one such entangled state has no relation to what took place at the time of the Big Bang. In this connection, you may wish to read the following article on quantum decoherence:

http://en.wikipedia.org/wiki/Quantum_decoherence