phpBB3 will run fine with those settings, the problem is that the install script won't continue automatically so you can use the following url to start the install after the checks:
yourdomain.com/phpBB3/install/index.php?mode=install&sub=database&language=en
obviously replace yourdomain.com with the actual domain, and change the phpBB3 folder to whatever you used as the location.
I've done several upgrades to version 3 for people who had this same issue.
