You are missing a '>' sign after <database , i.e, highlighted in red below:
Code:
<?xml version="1.0">
<server>
<world>
<shortname>setme</shortname>
<longname>I Forgot To Edit My Config</longname>
<key>some long random string</key>
<loginserver>
<host>eqemulator.net</host>
<port>5998</port>
<account>TestServerAccount</account>
<password></password>
</loginserver>
</world>
<database>
<host>localhost</host>
<port>3306</port>
<username>root</username>
<password></password>
<db>eqemu</db>
</database>
</server>