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Install.php just builds your database for you, something that your web host may or may not allow to be done remotely. Try installing the database manually. Find the file called init_db.sql and run that from phpMyAdmin, or whatever tool your server has.
Change the default username and password in connect.php to whatever you want (sounds like you've already done this part), then use that same username and password when logging into the admin panel.
If that still isn't enough to get you going, tell us step by step how you've tried to setup phpdig, and we'll see if we can point you in the right direction.
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