What version of MySQL is your server reporting? You can run this query to see what is being reported by your server:
It will return the current version. The checks by the installer should be checking your php version, not the MySQL version that you have in place. You will need to have php version 5 or greater installed. To check the version of php that you are using you should make a php info page. Make a new php page that has only this line of code in it:
<?php phpinfo(); ?>
When you view this page on the server it should report all of the info about your php setup.