Ok its pretty clear that that isn't the problem. Someone else is having the exact same problem as me and he installed it from the discs.
Heres the thread.
http://forums.pwnedemu.com/showthrea...2499#post32499
We have tried basically everything we have found and it still doesn't work.
This is what exactly happens to both of us.
Start EQ Up
Login to server select
select server
get to loading screen
loading screen finishes loading
boots us back to login
Some servers don't even let us get to loading screen just freezes and brings us back to login.