I just installed PP in my local machine - everything's working smoothly.
I tried to do the same steps in my server; the test passes, and the database gets created, but when I try to login, this happens:
We are sorry, but ProjectPier failed to connect to the database. Error report has been sent to the administrator so problem should be resolved soon.
I don't think that the database values are wrong, because the tables actually got created. The user can connect to the database (with localhost and % host) and execute queries. It has all the permissions.
It happens with both 0.8.6 and 0.8.8A2.