If I understand the terms correctly, if it were stripped, it would not stay in there. You couldn't screw it in because all the little ridges were "stripped". It could be cross-threaded, which means someone forced the screw in there crooked, or not straight with the ridges. It could also be possible that someone replaced a sewing machine screw with a regular screw, which would result in something similar to the cross-threading.
Just in case you don't know, sewing machine screws are not standard screws. That means the spaces between the ridges and the pitches of the ridges are not to the standards set up in the late 1800s. Sewing machines were already being manufactured before the standards came into common usage. So the sewing machine manufacturers continued to use the same screw standard they had always used. The moral of the story is keep up with your screws or pay $2.00 or $3.00 each for them from the old sewing machine guy.
Your problem is most likely that the screw has never been removed (or it's been a really long time) and it's just stuck. Get that PBblaster. It worked for me on three old Kenmore machines I was trying to part out. (I boogered more screwdrivers on project that you can imagine.) Use a screwdriver with a substantial handle that fits the slot exactly. If you have to buy one, take your sewing machine screwdriver to the store with you so you can match its width and length.
bkay