WordPress MU

I am trying to install wpmu on my vps with a dedicated ip.
I am doing this for my business site and want to create a community for my biz.
my ecommerce software is on shop.domain.com
I have a current wp install on blog.domain.com
I want to put wpmu & buddypress/bbpress on community.domain.com

I am getting a database connection error.
I changed the directory community to 777
and then it asked me to also change the wp-content to 777 and I did.
I filled in the info on the install form and hit enter.

(note: I changed the blog.domain.com wp-config file name temporarily to prevent any possible issues.)

I keep getting a Error Connecting to Database page.

Any suggestions?
I really need this asap.

Nor sure about the database connection error since we can't see what you're looking at (Ask your host to check as they'll have access. You'll have to send them the information you;re entering) but installing into an addon subdomain isn;t recommended as you;re doing a rewrite on top of rewrites already present. Best bet would be to create a separate account just for the subdomain and install wpmu within the web root of that. You can do it but it;s not recommended especially since you already have a wp install in the current root.

I keep getting a Error Connecting to Database page.

then your db details are incorrect. the user must have all privileges on the db.