Today I met this issue..
Its happened because one guy installed the mysql and now he forgot the password. So we decide to uninstall the existing mysql. and install a fresh one.
But when we try to install its asked current password, and if we click next, its failed at "start service"
we tried to uninstall and remove the directory under program files . but didn't help.. After a little googling found that we have to also remove the MySql data folder inside c:\documents and settings\all users\application data\
Its better to do that, search "MySql" in C drive(or include other drives) and delete all folders.(because in some windows os it would be in another path) And do a fresh install. It will work. :)