Well, forgive me for assuming you read the readme ... what you need to do is make sure MySQLAdmin is running (if you are running WindowsXP ctrl+alt+del look under the process window and look for a mysql-***.exe program running - or a small green stop light in your tray window). If you have that running go to this link ... ignore all the eqemu downloads but the mysql ... follow it along and make sure you did exactly what it says (i.e. the commands to type into mysql)
http://forums.eqemu.net/viewtopic.php?t=6904
If you are 100% sure you did all that is on that page, come back and I'll provide more help.