On installation this error is being generated by install.php
Any ideas? You don't think it's a problem with the hyphenated database name do you? Can't change it as it's set by most hosting...

» Query:
ALTER DATABASE web36-bugtrack COLLATE utf8_general_ci

» Error Number: 1064
» Error Message: You have an error in your SQL syntax; check the manual that corresponds to your MySQL server version for the right syntax to use near '-bugtrack COLLATE utf8_general_ci' at line 1
» Additional Notes: Invalid SQL query

If a database name contains a hyphen in MySQL 4.1.x you need to enclose the database name with back-ticks `.

So in install.php change this

$db->query("ALTER DATABASE $database COLLATE $COLLATION");

to this

$db->query("ALTER DATABASE `$database` COLLATE $COLLATION");

It works!