WordPress MU

I am trying to install MU in a directory here.
Unfortunately it doesn't work. I assume it is something with the configuration of the NOBLOGREDIRECT. I have no idea what is 404 handler.
Anyway, here is my configurations (excluding the MySQL setting)

/** The Database Collate type. Don't change this if in doubt. */
define('DB_COLLATE', '');
define('VHOST', 'yes');
$base = '/';
define('DOMAIN_CURRENT_SITE', 'pixelme.info' );
define('PATH_CURRENT_SITE', '/mu/' );
define('SITE_ID_CURRENT_SITE', 1);
define('BLOGID_CURRENT_SITE', '1' );

/**#@+
* Authentication Unique Keys.
*
* Change these to different unique phrases!
* You can generate these using the {@link http://api.wordpress.org/secret-key/1.1/wpmu/salt WordPress.org secret-key service}
* You can change these at any point in time to invalidate all existing cookies. This will force all users to have to log in again.
*
* @since 2.6.0
*/
define('AUTH_KEY', 'put your unique phrase here');
define('SECURE_AUTH_KEY', 'put your unique phrase here');
define('LOGGED_IN_KEY', 'put your unique phrase here');
define('NONCE_KEY', 'put your unique phrase here');
define('AUTH_SALT', 'put your unique phrase here');
define('LOGGED_IN_SALT', 'put your unique phrase here');
define('SECURE_AUTH_SALT', 'put your unique phrase here');
/**#@-*/

/**
* WordPress Database Table prefix.
*
* You can have multiple installations in one database if you give each a unique
* prefix. Only numbers, letters, and underscores please!
*/
$table_prefix = 'wp_';

/**
* WordPress Localized Language, defaults to English.
*
* Change this to localize WordPress. A corresponding MO file for the chosen
* language must be installed to wp-content/languages. For example, install
* de.mo to wp-content/languages and set WPLANG to 'de' to enable German
* language support.
*/
define ('WPLANG', '');

// double check $base
if( $base == 'BASE' )
die( 'Problem in wp-config.php - $base is set to BASE when it should be the path like "/" or "/blogs/"! Please fix it!' );

// uncomment this to enable wp-content/sunrise.php support
//define( 'SUNRISE', 'on' );

// uncomment to move wp-content/blogs.dir to another relative path
// remember to change WP_CONTENT too.
// define( "UPLOADBLOGSDIR", "fileserver" );

// If VHOST is 'yes' uncomment and set this to a URL to redirect if a blog does not exist or is a 404 on the main blog. (Useful if signup is disabled)
// For example, the browser will redirect to http://examples.com/ for the following: define( 'NOBLOGREDIRECT', 'http://example.com/' );
// Set this value to %siteurl% to redirect to the root of the site
define( 'NOBLOGREDIRECT', '' );
// On a directory based install you must use the theme 404 handler.

// Location of mu-plugins
// define( 'WPMU_PLUGIN_DIR', '' );
// define( 'WPMU_PLUGIN_URL', '' );
// define( 'MUPLUGINDIR', 'wp-content/mu-plugins' );

define( "WP_USE_MULTIPLE_DB", false );

/* That's all, stop editing! Happy blogging. */

/** WordPress absolute path to the Wordpress directory. */
if ( !defined('ABSPATH') )
define('ABSPATH', dirname(__FILE__) . '/');

/** Sets up WordPress vars and included files. */
require_once(ABSPATH . 'wp-settings.php');

Can anyone see what I did wrong here?

You have an existing single WP at root and you want to install WPMU in subfolder. Check out this tutorial first - http://wpmututorials.com/installation2/installing-in-a-subfolder/

I tried the instructions there but it didn't work. The problem is with my configurations there. Probably the VHOST and the NOBLOGREDIRECT.

- can you confirm you didn't edit the config file and let MU create it?

- also, where are you hosted? there's a few places that bork the MU install if you don't have the right account.

No, I edited it because I didn't reach the stage where I automatically fill the hosting server's details.
The system is hosted on a subdirectory, but I tried it on a root and same problem with connection to the DB.
I would really appreciate it if someone could upload a script of how a configured file should look like because I have a feeling that I defined something wrong and uncommented some lines.

The system is hosted on a subdirectory, but I tried it on a root and same problem with connection to the DB.

We know where you are trying to install your WPMU. The question is more of which webhosting service are you hosted on? As andrea_r mentioned above, there are some webhosts which don't allow WPMU install. Some might require you to upgrade your account.

As for copy of what should be in htacess - you shouldn't manually edit the htacess.dist file nor the wp-config-sample.php file, because that would interfere with the WPMU installation. Just upload the originals to the directory subfolder.
http://trac.mu.wordpress.org/browser/trunk/README.txt

"No, I edited it because I didn't reach the stage where I automatically fill the hosting server's details."

Well, you'll have to explain what you did see instead. Editing the files won't jump-start the install like single WP. Not unless you want to re-create the database manually too.