Hey there,
I'm having the same problem: "Error #2006:MySQL sever has gone away." So many people get this problem, I wonder why there isn't a sticky on it yet!
Anyway, I did countles searches on the forum and followed every suggestion. I tried the GRANT ALL PRIVILEGES thing. I tried redoing my ini files with no spaces. I tried redoing the eq database (I've tried the one that came with the 0.5 zip and the 0.5 moving database). Ad Naseum.
I am running out of ideas and searching this site isn't giving me any further help. Anyone who recently fixed this care to tell me what they did that finally worked?