Hi,
First of all, please do not install server files on a path that might be reachable via a web server. I am not sure about SME. but if /home/e-smith-files/ibays/fop2 is reachable via web, then it is very bad practice to put the server files there, as you will be exposing configuration files, etc. Only the web portion should be inside a web reachable directory. The server files should be located outside any public accessible directory, like /usr/local , /opt , etc.
When you run:
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./fop2_server -c /path/to/config
[/fixed]
You are actually running the fop2 server, without daemonizing it, so it will took the console until you stop it with ctrl-c. That is normal and expected. If you want to send it to the background, pass the -d parameter, like
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./fop2_server -c /path/to/config -d
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Now, for creating users you need to have the database and tables created. If the mysql credentials you put in /admin/config.php have permissions to create tables, then you only need to create the database (that is the easiest way to do it, let the manager create the tables if they are not there). Or, you can run the install.sql commands to create the tables. My guess is that the database is not created, or you do not have enough privileges to create tables.
Best regards,