[eluser]InsiteFX[/eluser]
It looks to me that your username and password is different in your code or for MySQL.
I have XAMPP 1.7.4 running on my Windows 7 Pro with no problems.
NOTE: Do not place XAMPP in the c:\Program Files or c:\Program Files(x86) it needs to be placed in the root for it to work right! c:\xampp
Check your username in application/config/database.php and your MySQL and make sure they match.
1) Can you login to phpMyAdmin using username and password ?
InsiteFX