well it does say only chmod the files that were uploaded .. not you root directory or anything.
when u say 'a mysql section' , do you mean you have a section in your web control panel where your site is hosted?
i'm not familiar with that script, but if it wants you to chmod 777 it, then it needs write access to those directories and files.
1. do you have mysql on your web server?
2. does a mysql database which you have a username/password to already exist?
if so, then just use that database. you don't need to name it anything in peticular, .. just go to
step 5 and fill in the datbase/username/password and it should work.
if this isn't clear ( which i don't think it is ), try asking again in different words

heh, .. i might understand better.