[fido123]

Might be off on the mysql_error(); part. If not just delete everything after 'or' on line 1

<?php
mysql_connect('localhost', 'USERNAME', 'PASSWORD') or die (echo mysql_error());
mysql_select_db('DATABASE_NAME') or echo "Database does not exist";
?>

If this doesn't work I'm pretty sure the problem is in your database. If you could post the output of the following commands it would be great. To make a lot file just use \t FILENAME to start logging then \T to stop (might be the other way around):

SHOW DATABASES;
USE (database you're trying to use);
SHOW TABLES;