[Shin Noir]

<?xml version="1.0">
<server>
        <world>
                <shortname>Rawr</shortname>
                <longname>Another EQEMU Server</longname>
                
                <!-- Only specify these two if you really think you need to. -->
		<address>test.com</address>
		<localaddress>127.0.0.1</localaddress>
		<!-- Loginserver information.  -->
        <loginserver>
		<host>eqemulator.net</host>
		<port>5998</port>
		<account></account>
		<password></password>
        </loginserver>

                <!-- Sets the shared key used by zone/launcher to connect to world -->
                <key>some long random string</key>

                <!-- Enable and set the port for the HTTP service. -->
                <http port="9080" enabled="true" mimefile="mime.types" />
        </world>

                <!-- Database configuration, replaces db.ini. -->
        <database>
                <host>localhost</host>
                <port>3306</port>
                <username>root</username>
                <password>password</password>
                <db>peq</db>
        </database>
</server>

There's my configuration..

[11.11. - 13:11:55] Failed to connect to database: Error: #1045: Access denied for user 'eq'@'localhost' (using password: YES)

If you look, it is trying to access MYSQL with username "eq" but your config file states it is trying to log in as "root", so your config file isn't being read correctly.

Make sure the config file is in the same directory as the executable file, and is named eqemu_config.xml