I guess it still didn't work then. At this point [scratching head]: Consider upgrading your web2py. Create a brand new app to test the most basic DB function is there. Delete contents of the databases folder. Change the DAL connection string in db.py Put a simple table def in the db.py Run your app, check whether there are *.table files in the databases folder, and real tables in the DB. If not, I suggest posting your DB connection string (needless to say change the passwd), and define_table function here.
Sorry if I'm missing something obvious, maybe someone else also has some better advice to get this working. Regards, D