What's wrong with my host? Installing drupal on it is driving me nuts.

I thought the combination of moving to a VPS and using 5.1 installer would make life easy, but I am having a harrowing time. After 3 days of all kinds of errors (first it was not understanding that settings.php didn't have to be edited before running the installer, then it was Unix owner/group issues for which I managed to learn enough of chown and chgrp to set it right), I managed to get the installer to set up the site,

But, when I followed the installer's instructions to chmod settings.php back to a more restrictive permission (I set it to 600), I go the following message:

Warning: include_once(./sites/default/settings.php) [function.include-once]: failed to open stream: Permission denied in /home/domain/public_html/includes/bootstrap.inc on line 238

Warning: include_once() [function.include]: Failed opening './sites/default/settings.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/domain/public_html/includes/bootstrap.inc on line 238

Warning: Cannot modify header information - headers already sent by (output started at /home/domain/public_html/includes/bootstrap.inc:238) in /home/domain/public_html/includes/common.inc on line 141
Unsupported database type

The database type is unsupported. Please use either mysql for MySQL 3.x & 4.0.x databases, mysqli for MySQL 4.1.x+ databases, or pgsql for PostgreSQL databases. The database information is in your settings.php file.

For more help, see the Installation and upgrading handbook. If you are unsure what these terms mean you should probably contact your hosting provider.

Here is the exact trouble sequence:

1. Logged in as unix user to my VPS through putty
2. changed to su and then to the home directory of the domain I was trying to install drupal on
3. Typed www.mydomain.com into the browser and got a message saying drupal needed to write to settings.php
4. chmoded the file to 777 and the installer completed the set up
5. Followed the installer's instruction to change back settings.php to something safer, so chmoded to 600
6. Clicked on the link to create the first account
7. Got the error above that referenced settings.php, so chmoded it back to 777, hit the browser's back page and completed the account setup process
8. Clicked on the Administration>>File Management link and found that files directory had to be created and be writeable. Did that in putty and found it wasn't writeable, so chmoded it to 755
9. chmoded settings.php back to 600
10. clicked on the administration link and was hit with the same error message referenced above

At this stage I am left wondering how many times I have to chmod settings.php back and forth.

On my previous host, after setting up the site, creating the first account and logging in, I just had to click on the File Management link and drupal would create the files directory for me automatically and make it writeable. Never had any of these waltzing with settings.php. Clearly, something is wrong with my setup.

The owner/group settings for public_html folder of this domain show as acctusername/nobody. All the rest of the folders and files for drupal are acctusername/acctusername, so this can't be the issue.

Could it be that I am connected to the account as su while the installer is doing its work? That's the only other variable I can think of. Do I need to be connected as the acctusername? But, what's the point of a VPS and su then?

Can anyone help, please? Apache is 1.3.37 (Unix), PHP is 5.2.0 and MySQL is 5.0.27-standard-log, all running on CentOS 4.0

Thanks,
Venkat