Vansers! I don't understand why you are having this problem. I installed phpvms last week and it was ok. And mark is right, alot of people shouldn't have this issue.
When i installed phpvms, it was quick step! Easy, maybe your making a mistake on the db which setting you shouldn't have on. Check your server again in phpmyadmin and make sure the db is correct becasue we shouldn't have this issue tht its not finding the database and its already there.
Also make sure your phpmyadmin is in the same server ip to your install.