Mukul,
I found the document you mentioned, which was written back in 2007. We've learned a lot since then. I generally try to discourage people from attempting a double integration for anything beyond a few seconds duration (which is what that app note does for a mouse). Integrated noise is mathematically guaranteed to explode over time if you don't have some other means (like GPS or radio beacons) to periodically rebaseline your position.
And yes, for the general 3 dimensional space, you cannot rely on just a 3-axis accelerometer. Generally full 9-axis sensor fusion is required because you have to map acceleration measured in the sensor's frame of reference back to the global frame.
Regards,
Mike