Finding the chords of a song

When I started playing the piano, I had absolutely no clue about chords. Infact, I used to wonder how do people play using both their hands, when I struggle to play with just one. One fine morning, I felt it's about time I learn chords. I was so enthusiastic that I even placed holds on a couple of books in the library that teach you how to play chords in less than a week! Read exhaustively on chords, rhythmic patterns and stuff, only to realise its too much for me. Since I'm just a "bathroom singer" kind of keyboard player :), I thought I'll play chords as and how I like. I sat down for about two days, read some material, the basics I should say and devised a chord-determination algorithm. Surprisingly, it yields good results most of the time. And that's why I decided to share it with my visitors.
Here you go!
Step 1: Identify the notes of the song corresponding to the tune. The song will include only those chords which are combinations of these notes.
Step 2: Analyse the song, line-by-line. Divide each line of the song into logical segments, call each segment a measure. There's more to a measure of a song that what is mentioned here. For simplicity, I'm calling a segment a measure. A measure can typically include 3-6 notes of the tune. Now the question is, where do you set the break points inorder to get measures of a line of song? Here's the simple rule of thumb: Follow your intuition! How I look at it is, I set the breakpoint at the transition of the song from one scale to another. Now, "scale" is yet another technical term like "measure". Pls note that all these terms are used in a very general sense in my context.

Lets take an example. "Yeh mera dil" from Don.
Yeh mera dil pyaar ka deewana
------------ -------- -------
Deewana deewana pyaar ka parvana
------- ------- -------- -------
Aata hai mujhko pyaar mein jaljaana
--------------- ---------- --------
....
Listen to the song keeping an eye on the segmentation above. Sounds right?
I play the first line ("Yeh mera dil pyaar ka deewana") using only three chords. The original song might include many more, but the tune can be contained in three chords. I guess I'm sure of that.
Step 3: Having identified the measures, the next task is to map each measure to a chord. The rule for this is, the chord that correctly maps to the measure should include as many notes of the measure as possible. For instance, look at this:

Yeh mera dil
D   E D    E C
The chords C and Aminor include both the notes E & C. But how ironical, I play Dminor chord for this measure. An exception in the very beginning! Well, its like this. Generally, the note with which the song begins determines the "scale" of the song. Most of the chords would be centered around this note.
Try playing this measure with C, Aminor and Dminor. You'll see the difference yourself.
Here's what I do. I have this simple chords table which I drafted out.



Step 3.1: Given a measure, using the table above, I identify all possible chords (only major, minor and flat) that include the notes of the measure. I then set the "accompaniment" of my keyboard to ON, and play the notes of the measure with each chord. The chord that perfectly carries the tune of the measure is the one I go with. Somewhat a brute force approach, but for a layman like me, it sure works.
Step 3.2: Once you get a rough idea of the chords for a line (like "yeh mera dil pyaar ka deewana"), play them in sequence without playing the notes. If you can identify the tune by playing just the chords, your chords are right! Otherwise, use your judgement and tweak the chord combination by reconsidering those chords that you've discarded in step 3.1 above.

Repeat steps 3.1 and 3.2 for each line of the song.

Step 4: That's the end of the algorithm!