Please follow this guide in order to fix the setup failed issue.
Before uploading all Discuz! files to your hosting account, please use your preferred advanced text editor (Notepad++, UltraEdit or other) to follow the instructions
Note: the following tutorial is on how to change it while using UltraEdit software. On Notepad++ it might be a little bit different.
Step 1: click "Find/replace in files" button on your text editor;
Step 2: In the dialog click "Replace in files" tab;
Step 3: click "Find what:" textbox, input "TYPE=" (without quotes);
Step 4: click "Replace with:" textbox, input "ENGINE=" (without quotes);
Step 5: in "In files/types:" textbox, input "*.php;*.sql" (without quotes);
Step 6: check "Match case" checkbox on;
Step 7: click bottom-left "Advanced" icon;
Step 8: check "include subdirectories" checkbox on;
Step 9: click "Directory" textbox and select location where your Discuz! files are located;
Step 10: click "Replace All", UltraEdit will do the work automatically;
Step 11: when replacing is done, please close UltraEdit and pack (archive) Discuz! files to zip file and upload it via "Import Website" function in the Control Panel;
Step 12: Open your browser, type in your website address in address bar and hit ENTER, you should see the install guide and it should work normally now :)