Here is what I've done, and based on recent lessons, what I'm now doing and recommend:

Either you or GoDaddy need to FIRST set up the database instance.  I always let GoDaddy do that part [My Account>>Web Hosting>>Content>>GoDaddy Hosting Connection>>DotNetNuke>>Install], though you can do it from their hosting console. [My Account>>Web Hosting>>Launch>>Databases>>SqlServer]; I've never done it...

When you let GoDaddy do the install, all the connect strings and machinekey wind up in the resultant web.config file and in the correct format.

I've never had a 'virgin' install done this way fail to at least launch.  If this is all you want, you should be done and ready to play.

IF I am creating a backup of another site... [I don't think you are doing this?]

First, if at all possible, add the NEW 'backup' site's url as a portal alias into the site to be backed up.  Then back up the OLD db. I use the GoDaddy Web Hosting console to make the backup.

I then 'restore' my preferred OLD database.bak [DATA] to the NEW database they set up.  Remember you will need the NEW connect strings, but the OLD machinekey (it stays with the data, not the database(house)...

Save a copy of the NEW web.config file to a very safe place...

I then delete all the info in the NEW  'dnn' directory on the host and copy everything from the OLD directory/instance to the NEW one (dnn files and data match on the NEW instance, but the dnn web.config file [copy of OLD] is still pointing to the old database...).

Armed with the NEW database, and all the connect strings and passwords for it [from the NEW web.config file], Edit the web.config to update the connect strings to the NEW db and password.  The machine key should not need to be touched since in this case it should already match the DATA.

Hope this helps.