Yes you were right... I was able to fix the database part and it was because 1and1 doesn't allow remote database connections.
Am now having a problem with the PayPal express link, it automatically just goes to the pp_checkout_failure.php
<form name="PayPal_ExpressCheckout_form" action="<?php echo $_SERVER["PHP_SELF"]; ?>" method="post">
and also found some other suggestion in support forum - tried this code as well:
<form name="PayPal_ExpressCheckout_form" action="<?php echo $_SERVER["PHP_SELF"]; ?><?php echo (isset($_SERVER["QUERY_STRING"]) && $_SERVER["QUERY_STRING"] != "")?"?".$_SERVER["QUERY_STRING"]:""; ?>" method="post">
neither work, I am able to process payments using the credit card option just fine. Any suggestions?