After wasting lots of time trying to get a database connecting to Rails on my MacPro at work I finally found the magic combination for MySQL.

• Install MySQL.
• Install the MySQL GUI Tools set.
• Using the MySQL Administrator from the GUI Tools add a new user.
• When adding permissions for the use set the hostname to be "(computername).local", e.g. "mymac.local".

It is that last part that had me pulling my hair out - using just "%" didn't work for me, it had to be "(computername).local". Silly thing.