It links to upload document page insead of pulling the infopath.
http://sitecoll/sites/0438A/_Layouts/listform.aspx?PageType=8&ListId={7BA9BF8D-52B5-432D-8068-B5290D2E7602}
But if i edit the web part and just do nothing and click apply then the link is fixed and javascript link is established for "add new document" and now infopath form opens.
Content is set to default infopath content type.