Re: point 4, SQL server does not map the user to the database just because you said that the DB is the default DB for that user.  Stupid huh?

Re: point 6 and 7 .. in the login properties dialog, do these things:
- check the "map" checkbox next to the DB name (setting default DB should do this but does not)
- make sure the correct user name is shown next to the DB name after checking map.
- type "dbo" into the default schema field
- under role membership, click the db_datareader, db_datawriter and db_owner boxes

You can test if this worked by clicking new connection in sql management studio, then selecting sql login instead of windows login, then try to login with the new user you just created.

Re: point 13, this happens after an install fails part way through.  The DB has been partially created and is now useless, delete it and recreate a new blank db with the same name, and set the same user permissions in point 6 and 7 again.  you will not need to change web.config

JK.

This is incredible! When I was about to give up, I took a last shot. Restarted the computer, went to the installation wizard, chose the "Auto" installation and wala! your portal has been created!

Now, I'm not sure what happened. Maybe restarting the computer made the connection to the database clear. But if this is not the case, then the problem must be the installation wizard. Hope someone with sufficient knowledge about this field will give a reasonable explanation.

Ian, the environment in which I'm installing DNN 4.5.3 is my local computer, so I do have full control over the database (unless I do not know what full control is - my db knowledge sucks anyway! )