Why on earth is is SO DIFFICULT to install WP 3.0

This all started when WP apparently could not upgrade itself automatically to V 3.0.

If you cannot upgrade automatically, then upload new WP 3.0 files and folders via FTP or cpanel. After that, when you access wp-admin, you’ll be given instructions what to do. You should not have to go through setting up DB info again as it was already there in your 2.9.2 installation.

Agree with mercime.
If AutoUpdate doesn’t work, (and it doesn’t for us either) then simply upload the folders and files to the same place in your Domain as they are for WP 2.9.2
You will be able to completely replace wp-admin and wp-includes FOLDERS. entire
wp-contents probably only needs the new 2010 Theme added.
In your root directory, which is where the wp-config.php file lives, you should be able to replace everything except your config file and perhaps stuff you put there or your plugins did, such as: Google XML sitemap installs two files: sitemap.xml and sitemap.xml.gz
But WP 3.0 only has the wp-config-sample so you can upload that whole list of files with index.html and wp-config-sample.php in it without messing at all with your config or any plugin generated files in there.

We do this always here with each update (nil auto-updates here) and there is no problem.
If you corrupted your actual config file, I would suggest going back to a restore point to get a stable setup in WP 2.9 and then FTP the WP 3.0 Folders into your Domain as suggested above.

check your username/passwd for the database and check you haven’t changed the password to the MySQL user than changing your FTP password if you ever tried that check your wp-config.php file via FTP login use FileZilla, an open source FTP client and check whether the credentials
DB_name DB_username DB_password DB_hostname are all correct!

Thanks to everyone for the speedy replies – I was stuck in the endless loop issue as discussed elsewhere. I ended up having to delete all my DB’s (zero data anyway), and re-create them with the SQL Wizard in cpanel, which apparently has the option (missing in regular SQL) to give or revoke all permissions…

That worked, but I am still wondering why:

a) WP can not initiate a simple upgrade procedure at version 3 already
and
b) my original DB settings would not work with the web-based creation interface.

This must be frustrating for thousands of users. Why, yes, it is… I just googled it: 7,820 items for “This either means that the username and password information in your wp-config.php file is incorrect or we can’t contact the database server at localhost. This could mean your host’s database server is down.”

Anyway, thanks everyone.