I ran on MySQL 5.0 (can't remember the minor version) and had no real issues straight out of the box (simple install and update). I know some believe the Loglevel in tables "variables" has no purpose anymore, but you might set the 0000 to 1111, and see if your logs spit anything out.
(I have yet to get the new logsys working, but this appears to still work for me...)
What if you equip your char and log out, then back in? Do you still lose stuff?
Edit: Check this post on DRP site:
MySQL 5.0 Inventory Issues
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