Problem fixed!
Thank you all for your help
For the record
First I strongly believe that my FTP client corrupted the renaming of the settings.php file giving the errors originally posted (Cyberduck on the mac, and it has happened before)
Second, I wanted to use PHP 5, and to do that I had to add a line to the .htaccess file. Otherwise it would default to PHP 4 but total competency (or even partial competency) of .htaccess evades me and that created other errors.
All was solved by using another FTP client, restructuring the directories such that the domain points to where a new .htaccess (for PHP 5) lives, and having Drupal loaded in its own separate dir, with its own existing and untouched .htaccess
Now I just have to figure out how to add this "AddType x-mapp- php5 .php" to Drupal's .htaccess
Again, thanks for the help