I was able to reproduce the same world.exe output but with a different SQL error message, (#2003 opposed to yours). I just stopped the sql service that was running in the taskbar and instant error spam ~.~
Your text implies that you're able to connect to the sql server, you're just getting blocked by the name/pw.
Make sure that it's running, anywho, will only take a moment to check (ctrl-alt-del -> processes tab and look for sql).
Check your db.ini file to make sure that you did enter that name/password correctly, also check to make sure you didn't accidentally tack on a space at the end of a line.
Hrmm, also maybe you want to redo the granting of privileges for your username/password step of the how-to's.
If you're still having problems you may want to start posting config file text for us.
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