You need to create a mySQL database and server for your nuke using Dreamhost's panel first.
Wait for it to become active
While you're waiting, go to one of the nuke support forums and spend a little time reading about installing nuke and what might go wrong.
nukecops.com, nukeresources.com or nukeforums.com are good places to start.
Once your database is ready to go, make sure the info is correct in your config file.
Follow the installation instructions. If you have set up your database correctly it will create the tables for you (it will seem a lot less confusing if everything is set up and ready to go).
One more thing... Maybe try postnuke instead... easier to install, less security problems.