Just follow README.mysql.txt

mysqladmin -u root -p create drupaljam_demo
mysql -u root -p 
> GRANT SELECT, INSERT, UPDATE, DELETE, CREATE, DROP, INDEX, ALTER ON drupaljam_demo.* TO 'drupaljam_demo'@'localhost' IDENTIFIED BY 'drupaljam_demo';

Prepare settings.php

mv default.settings.php settings.php 
chmod 777 settings.php

Add the site to apache (my steps)

cd /etc/apache2/sites-available/
cp drupaljam.dev drupaljam.demo
vi drupaljam.demo
a2ensite drupaljam.demo
vi /etc/hosts
# add 127.0.0.3 drupal.demo