I was also getting same error, I tried the following.
make username = root
and leave password = '';check this link for more reference http://www.scriptol.com/wordpress/installing-wordpress-locally.php
Cheers mate that worked! What username and password is that for though? I mean the next stage asks you to create a username and password for the wordpress dashboard...what part of the site is the username root password: blank ????
Cheers
Aaron