Actually, mysql is connect to PHP, not to Apache and no, they don't have to be in the same directory. The php.ini file on your system must have a line like this:

extension=mysql.so (or mysql.dll...

I remember having connection problems when I started which I resolved by appending the mysql socket address to the host.

mysql_connect (host:socket, username, password)

I can't remember...

Try opening a command window and check if you can connect with the root user and 'password' as a password:

> mysql -u root -p
Enter password: password

(make sure the mysql command is in your...

Since it's the only place left with no error detection, how about trying:

if (!mysql_select_db("users", $con))
die ("Database 'users' not found");