In tried installing MySQL server 5.0 but keep getting the above error message.
And I tried going to the service section via control panel only to see service-started.What is the way out?
Help is appreciated.

I believe it usually indicates a botched installation, possibly due to the service still running when an update was installed. try a reinstallation after making sure that the server isn't working (check processes look for mysqld-nt)

I have installed the server.But when I tried post-installation testing i.e
C:\mysql\bin>mysqlshow instead of
+--------------------+
| Databases |
+--------------------+
| information_schema |
| mysql |
| test |
+--------------------+
what I get is
+--------------------+
| Databases |
+--------------------+
| information_schema |
|
| test |
+--------------------+ mysql is missing.What is the problem?pleasse hepl.

did you completly remove MySQL before attemtping a reinstall?

Yes I uninsatlled everything.This is what I did.I uninsatlled via Control panel,addor remove programs.
Then went to Programe files and deleted MySQL folder before installation.
Please is there anything I am missing out on?
Thanks for your help so far I really appreciate.