I'll see if I can help.
I know you said you already modified your 
eqhost.txt, but just to make sure, if you want to connect locally, it should look like this:
[Registration Servers]
{
"localhost:5999"
}
[Login Servers]
{
"localhost:5999"
}
Also, just to confirm everything is as it should be, you need to have mySQL installed and an "eq" database set up (which needs to include the eqemu/eqemu account).
Next, you need to have 
db.ini pointing to localhost, so it should look like this:
[Database]
host=localhost
user=your_username
password=your_password
database=eq
Your 
database.ini file needs to look like this:
[LoginServer]
loginserver=localhost
worldname=Your server name
locked=false
account=
password=
worldaddress=localhost
loginport=5999
Lastly, your 
Boot5zones file needs to be pointing towards the localhost (which it does by default).
Now you'd need to first run 
Minilogin.exe, followed by 
world.exe, lastly followed by 
Boot5zones.bat (or 
Boot5zones.Win9x.bat).  At this point, your server is set up and ready for you to connect.
To connect, you'd need to either use EQW (as described in the readme) or 
eqgame.exe patchme.  The important thing is to make sure EQ does NOT patch, because it will overwrite your modified 
eqhost.txt.  Log in using username 
eqemu and password 
eqemu (actually, you don't really need to use that, because minilogin passes that to the worldserver regardless, so you could just type gibberish).
I hope this helps you.
- 1010101
(
http://www.gameroom.com/1010101)