Problems seting up remote MySQL

Hello !

I am trying to set up a remote MySQL server. I have both hosting and MySQL server as a blank installation. I installed MySQL 5.0.45 on the MySQL and I configured so that it works fine and can be accessed local & remote. I set up the other server, I installed cPanel on it and now I am trying to set it so that it will use the remote MySQL server. I set up the remote MySQL server by the book but it seems that it doesn't want to work properly. After seting everything up I get the following message:

The remote MySQL is not set up. Can anyone tell me why is this happening ? Should I do something else before trying to set up the remote MySQL server ?

LE:
I also noticed something interesting. When I run /scripts/mysqlup I get the following message: