I wrote a broad outline of processes from xampp download to defining a dynamic site in reply to someone else's post HERE. Bits of that may be useful to you.
I suspect that Site Sculptor set-up asks for Database details because of its integral CMS system which would require a database to store the content.
If the install of XAMPP, PHP, MySql and phpMyAdmin went to plan (and it usually does) you Just need to create a database (any name) beforehand using phpMyAdmin and the setup will create all the tables and relationships etc for you at the time of its running.
You will need to have assigned a super-user (root) password for your mySql installation, - if you haven't already, - its straight forward and detailed in the post I linked to above.
Typically then, your connection database details would be:
$hostname_PowerCMSConnection = "localhost";
$database_PowerCMSConnection = "yourNewDatabaseName";
$username_PowerCMSConnection = "root";
$password_PowerCMSConnection = "yourNewPassword";
And your site's folders and files would be in a sub-folder (site folder) of the xampp/htdocs directory, i.e. xampp/htdocs/mynewsite/