I am more into Apache, but in your case it is IIS that controls your server. Here is a [url=http://en.wikipedia.org/wiki/Internet_Information_Services]wiki[/url] entry. In the panel from IIS you should be able to to access your database and create a new one, including password. This is the information you want to use in your install script.

The host: localhost is probably correct if the server is on the machine you are working on. Check the base URL, it's the path info you see when you view a page you have put on your server.

Good luck

thanks well i got most of it working, but now when i go to backoffice i get a blank page. any idea why this would happen? i also notice quit a few page in the demo's area of the default page are coming up blank as well. god, i've been reseaching this whole process for 2 days now.

I think your base URL is not set properly. Open ../blogs/conf/_basic_conf.php. You will see on line 89:

$baseurl = 'http://localhost/b2evolution/blogs/';

Above this line is an explanation. As I stated earlier, I think "localhost" is correct in your setup (but do check: if you've got a page from your server in your browser, read the adresbar. It should say h**p://localhost/pagename.html.)
Now check where you've setup the blog. Is it in "b2evolution/blogs/" or in "blogs" or in "/"? Change line 89 accordingly.

Good luck