hmmm, that's weird... I did exactly what I listed above and it worked fine. I have it running here:
http://mendelson.gast.it.uc3m.es:9500/ (mailto:test@test.com / test)
are you using the dotlrn2.1.1 final tarball?
about the error, I get it too, but that's not important, since that has to do with the merge user and tracking functionallities.