localhost blues

I am very new at WordPress, as a matter of fact I am a novice! I’m trying to setup my localhost in my home computer (Windows 7 Pro). I am also a student doing web design (Veteran). This is what I’ve done so far;

1. Copied my WordPress 3.5 files to my xampp directory
2. Identify my htdocs directory and placed the files in my directory
(C:/xampp/dir.com/dir.com/mywpsite
3.Went to my wp-config.php and changed my define(‘DB_HOST’, ‘localhost’);
as it said in the book.
I’m getting this: Error establishing a database connection

In my live site everything is working so I’m wondering why. Oh, btw I have my xampp turned on on both Apache and MySQL.

Help please!!

Regards,

Manny