It worked when the below was set as launch options. Got this from a forum.

LD_PRELOAD="libpthread.so.0 libGL.so.1" __GL_THREADED_OPTIMIZATIONS=1 optirun %command%

Thanks for your response. Yes., it does...Results pasted below....Am running Linux Mint 13 KDE. I have been using optirun to play supertuxkart for a while and now TF2 for past week. Just trying to save the additional step of navigating to directory and invoking the script manually. Not a major issue.
Another question, how do i check FPS on TF2?
optirun glxspheres
Polygons in scene: 62464
Visual ID of window: 0x21
Context is Direct
OpenGL Renderer: GeForce GT 525M/PCIe/SSE2
126.440801 frames/sec - 109.280255 Mpixels/sec
159.736597 frames/sec - 138.057146 Mpixels/sec
165.706071 frames/sec - 143.216443 Mpixels/sec
154.227528 frames/sec - 133.295768 Mpixels/sec
162.476317 frames/sec - 140.425031 Mpixels/sec
162.353006 frames/sec - 140.318456 Mpixels/sec
131.529142 frames/sec - 113.678006 Mpixels/sec
141.082776 frames/sec - 121.935022 Mpixels/sec

Thanks for your response. Tried it but still not able to launch the game within Steam.
Should %command% be typed as-is or be replaced with something else?
Error log available in the link for you reference - http://pastebin.com/htknzNam

Hi - Am not sure if this is answered elsewhere. I copied the hl2-optirun.sh script available in another steam forum and TF2 games works perfectly when launched from terminal. But how do i launch the same file from with Steam?
I tried renaming the file to hl2.sh ( which i believe is the file used by Steam for launching the game) and it does not work. I suppose the file gets re-generated again even if changed.

Apologies, i've no experience on how bash scripting works. I will appreciate your guidance on this.

I would not mind switching to terminal to launch but can not do that when i do a steam only login.