Two Switches, Same Light Source

My house has a setup of controlling the same corridor lights from two different locations. The scenario is as follows:

Lets say Switch A is in off position, and Switch B is in off position, and the lights are off
When I switch on Switch A, the lights come on, and Switch B is in off position
When I switch on Switch B, the lights go off, even though both Switch A and Switch B are in on positions

Will Z-Wave be able to handle such a situation which maintains the state of the light irrespective to the state of the switches?

Yes. What you are describing is a 3-way configuration. But the precise details of how it will work depend on what Z-Wave switches you use.

If you use a Fibaro or Aeon micro switch, with standard electrical switches, then it will work as you describe.

If you use a Z-Wave replacement switch, the switch paddles will most likely be momentary.

Maybe this can help:

http://forum.micasaverde.com/index.php/topic,12497.msg114296.html#msg114296

-Gio