Using SVN (Pulled 17:30 28 Sept 2007 GMT) and 2.1.0-rc releases, I've discovered that using the $ symbol in a MySQL password causes the install to fail.

Errors indicated that (despite passing the first stage check) the password was not being submitted when mysql_connect was being called.

xera1 on #silverstripe recommended changing the following (line 591 in install.php):

	"password" => "{$config['mysql']['password']}",

to

 	"password" => '{$config['mysql']['password']}',

This corrected the problem.

Thanks for that hint Kevin - the reason for it is that inside "double-quoted strings", PHP assumes the $ sign precedes a variable name, so will try to find that variable name and substitute it in. Inside 'single-quoted strings', it will treat the $ sign as a literal $ sign, and not substitute it with anything.