Did you try changing line 9 to this? (removes the or die part basically)
$PowerStoreConnection = @mysql_connect($hostname_PowerStoreConnection, $username_PowerStoreConnection, $password_PowerStoreConnection);
The code is erroring out just trying to connect to the database, and really that connection file is exactly what Dreamweaver would output. The other test could be to create a basic php page and only have the connections include on it. My guess is that will still error out.
What kind of server are running on and are there any custom permissions or database settings or anything like that going on? I've been able to run the install fine on linux, windows, apache, IIS here so I'm having a hard time reproducing the issue on my end.
