Your site is probably on a windows host, if that is the case ignore the CHMOD commands (they are generally for *nix).
Still go ahead with the installation - if the installer can't write to it, you will be prompted to download it, whereafter you can upload it to your forum folder.
You need to create a DB to install the forum to.
You need to create a database, (whose name, and the db user username/password you need for the install page), for the installation of the forum.
On most paid webhosts, phpMyAdmin is pre-installed, and may be used to create a DB.
Sometimes you can create one via your hosting control panel.
Sometimes, its already created for you and you need to contact your host for the username/password to connect to it, and its name.
( some hosts which pre-create the DB for you *may* use your ftp username/password as the database username/password - but this is not always the case)
For most installs, you can leave the default 'localhost' as the Database Server Hostname.
If your browser supports flash, this tutorial may help you with your installation.
http://www.phpbb.com/support/tutorials/ ... in_install