I've used these howto's numbers times over the last few months, mainly in an attempt to become familiar with the process and also test various linux setups for performance and reliablity.
In doing so, I've encountered the mysql problem on just about all the occasions. My resolution is to open another shell window with putty and login to mysql with the following;
mysql -u root -p [enter]
At the "mysql>" prompt I issue the following statments;
mysql> use mysql;
mysql> update user set host='localhost.localdomain' where user = 'root' and host = 'localhost';
This has always allowed me to finish the ispconfig installation without problems. I will try checking the hosts and hostname on the next one to see if that corrects the problem for me also.