I had this same problem as well, but I installed MySQL using PHPTriad. I believe what I did to solve the problem was to create a c:\my.cnf file, which is the config file for MySQL (there is a sample in part of the mysql configuration).. I say I beleive because I did a few things, and the win2k machine has been causing me nothing but problems 🙂
That was on my win2k server. I have a win2k professional machine i use for development, and I used the standard MySQL distribution, and I had no problems at all getting MySQL to run, but I may have made a config file before i tried it (it was a while ago, I forget).
good luck.