thats strange, on the guide i follow there stands :
<More lines will scroll by, you might wanta go make some food at this point ,as this will take 10min plus to finish, again ignore the beeping. Then type >
GRANT ALL PRIVILEGES ON *.* to '%'@localhost IDENTIFIED BY '%';
After it finishs Type " Exit " . MySQL will close.
http://www.eqemulator.net/serverguide.php