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I just went through that-- I think you're better off preserving your root login just in case XOOPS is compromised.
You created a new MySQL database, and you then have to create a user AND give that user permission to access the database (I suppose root would work, but you still would have to give user "root" permissions for that database. See why 'root' is too confusing-- just create a new user for it).
I did that via Cpanel, not PHPMyAdmin. So how you do it may vary, but that last step is what I have forgotten on the two installations I did-- assigning the user to the database. Once I did that, install script was able to find it without problem.
Mac T