WinXP: Problem Connection Database

<********* ERROR *********>
Error establishing a database connection! This probably means that the connection information in your wp-config.php file is incorrect. Double check it and try again.
Are you sure you have the correct user/password?
Are you sure that you have typed the correct hostname?
Are you sure that the database server is running?
<********* MY URL *********>
http://localhost/blog/wordpress/wp-admin/install.php
<********* MY SETTINGS IN wp-config.php *********>
define(‘DB_NAME’, ‘myblog’); // The name of the database
define(‘DB_USER’, ‘blog’); // Your MySQL username
define(‘DB_PASSWORD’, ‘hide’); // …and password
define(‘DB_HOST’, ‘localhost’); // 99% chance you won’t need to change this value
$table_prefix = ‘ad_’; // example: ‘wp_’ or ‘b2’ or ‘mylogin_’
define (‘WPLANG’, ”);
<********* WHAT I DID *********>
I tried everything in one of the posting I read in this form, including what ever was told in install guide. I created a catalog in mysql with the name myblog, gave all the rights to the user blog. I can connect user blog with line command tool (mysql.exe) but not using website.
<********* SOFTWARE/HARDWARE *********>
Windows XP -sp2 (en-us)
PHP version 4.3.9
IIS
MySql Administrator version 1.0.14
MySql version 4.1
MySql server port 3306
I have AMD Athlon XP 2800+ (2.08 Ghz) with 960MB RAM
<********* NOTES *********>
PHP is working fine, and IIS is handling PHP great. MySql is running fine. IIS is running on localhost.