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This thread should be made sticky, and the fix should be rolled into a patch.
I was also having the same issue. The script assumes that you are installing XOOPS in the root directory of your server, which may be the common instance, but it is a damn big assumption.
Having that dot in the path is important. I have 4 portals (2 XOOPS and 2 PHP-Nukes) and 1 YaBBSE forum I run on my server, each in their own sub-directory tied to their own sub-domain names. If each one of those were to insist on being in the root directory for install or operation, life would not be fun for me.