"Unable to connect to a database using those credentials."
Name Your Site:
Finish the Damn Book
Subdirectory for site:
I think you ought to remove everything from your web directory, delete your database (or just remove all the tables from it) and start again.
I think it looks like you put something in "subdirectory for site" when in reality it should be left blank. What are the default values for Base URL and Subdirectory for Site that automatically get put in there when you start the installation process? In most cases (in fact, I don't think I've seen a case where this isn't true) you shouldn't have to change them.