Did you try doing the install using my instructions for installing MT on a DreamHost server?

By the way, in my mt.cfg file, the DataSource line is NOT commented out. It appears in mt.cfg after the other four lines.

You might also want to try the following steps to make sure you have the database config right. Replace the bits in bold below with exactly what you have in your mt.cfg file.

1) In a browser, load the URL db.correctdomain.com.
2) When you get the login prompt for PHPMyAdmin, enter correctuser and the password.
3) If this all works fine, make sure the database correctdb appears at the top of the list to the left.

Robert
http://www.wombatnation.com/