Well I took another path and used a shared DB. I tried instructions on forum and educhalk.org video but it failed with a 404 error on /wp-admin/install.php when it tried to create new WP blog. Apparently the godaddy installer does not leave that file in the directory so I uploaded it into directory and tried again. This time success.
I still have no idea why the multiple installations with mult. DBs would not work. At least for the momnent I have 3 blogs all hosted on same site with a shared DB.
In case it is not clear NONE of the WP instances were installed in root directory. Thanks – Steve
