The only error is you need to use the correct mysql database information as you created it and used it in your new auction admin->configuration. You should also finish the installation by c reating the sql table. If you do not have users and items in the old version no need for this.
1)-Remember the 2 installations should be one the same website or server so the upgrade script can connect to both sql databases. You can not install the new auction on another server and use the upgrade script.
2)-you should enter the NetAuction 6.xx mysql databse information in the upgrade script and this is why you are getting the above error, if you can not get it no one can help.
Simply install Auctionawy 2005 on the old server under another directory say cgi-bin/auction1 and the upgrade script on the same directory and everything will work normal after this.