If running on mysql, you have to set lower-case-table-names =1 for later mysql versions for the serverkit to work correctly now on SQL. Actually, now that i think about it, in my experince this is only necessary when connecting to a unix hosted mysql db. (I assume the test of the created DSN with MyODBC connector passes?)
Also, new dbs in the latest mysql default to a new characterset. You want to use latin1.
Also, make sure your kit will start on the flatfile first...
you also need to edit the serversetup.gf to add the new directory server <--- try this first