Okay so I kindof disagree with your instructions upon reading them further.
At setup instead of "Typical" choose Custom. You can leave the options as is, but it gives you a different setup menu.
When you get to the part about setting up the server, DON'T choose standard actually.
Pick detailed.
First option should be developer machine.
Next should be Multifunctional Database.
Leave the InnoDB Tablespace settings as is and hit next.
Manual settings for the next window, concurrent connections should be 15.
Enable TCP/IP Networking and UNCHECK Enable Strict Mode.
Best support for multilingualism.
Install as a service, uncheck the Bin directory one.
Then hit execute.
Instead of Toad, at least on windows, I suggest people use the MySQL GUI tools here:
MySQL :: MySQL GUI Tools Downloads
Administrator and Query Browser will be much easier.
Once you've got those installed fire up Query Browser and right click in the "folder" listing and hit create schema, name it opensim or whatever.
Use the same instructions for changing the ini file.