Issue installing MySQL 5.0.27

[JrFaust]

Setup is
Windows 2003 server with all the windows updates.
On a Dell 2400 server. Dual PIII 1Ghz 2GB ram 20GB drive...
I can get past the first part on the install no issues.
I get to the Instance Configuration Wizard and things just arn't right.
Step by step.
I do the detailed config.
Then Server Machine.
Then Multifunctional Database.
Then InnoDB in the default spot.
Then manual and 200 connections.
I then enable TCP/IP with a port of 3306, and dissable the Strict Mode.
Standard Character set.
I install MySQL as a service and have it automaically start service name is MySQL5 and I include the bin dir in window's path.
Then modify security settings and set my password.
I click exicute and it does all but fails with a connection error.
"Error Nr.1045"
"Access denied for user 'root'@'localhost' (using password: no)"

I did have 4.x running just fine I was messing with the database and blew it up Oops so I thought well I might as well upgrade to 5.x so I uninstalled 4 and rebooted then DL'd 5 then all this started.

Has anyone else that is running windows had the same issue with the install for 5?

I can get connected to the database but world will not connect to it.
If I use the command c:\mysql\bin\mysql -u root -p
Then it will ask for my password and I put that in and it connects.
Or did I miss something to get world to connect to mysql 5?

Thanks for your time,
Rob