Well, a few months ago I had tried this and became deeply, deeply frustrated. It seemed nothing I did was working, and the situation was hopeless, so I stopped trying to set up my own Open Sim on my local machine. Yesterday however someone asked me if I ever got it working, and I told them no, but maybe I could look into it again.
So I did. Only to find that my first google search and attempt at setting it up again were successful. I love when things work out :)
Here are the instructions that I followed :
http://arianeb.wordpress.com/2010/04/14/setting-up-a-simple-open-sim-sandbox-on-your-hard-drive/
