Thanks PGO, I've tested the files and got them working. I've provided the steps that I followed for anyone having the same problem.
1. Install the USBDM drivers from sourceforge. Plug in the USBDMLT module and check that the device is successfully installed. I also installed the USBDM software package.
2. Copy the DLL files in TBDML.zip into the bin folder of NoICE.
3. Now in NoICE, set target communication to TBDML. This should open the USBDM configuration window. where you should be able to detect your BDM.
Note: I use PLL to set frequency, so I had to change BDM clock select to Bus Clock/2 to prevent NoICE from complaining about frequency mismatch.
4. You should now be all set. I did notice that resetting the processor breaks the communication (maybe due to the PLL being set).