Sounds lilke problems I have had in the past, until I realized that Dreamhost’s configuration does not like executable files with 777 permissions. In each case, for me, changing the permissions on all executables (.cgi, .pl, etc) from 777 to 755, irrespective of the script author/provider’s instructions, has solved the “Internal Server Error” issue. This assumes that the user who uploaded the file is the user who owns the directory (which should be the normal default for Dreamhost shared hosting accounts).
Of course, you will still have to properly define the paths in the indicated files, but I will almost guarantee you that the script(s) will not run under Dreamhost with permissions set to 777.
Just my 2 cents worth '-) Good Luck!