Sorry you are having trouble. Thank you for the detailed report.
Let's rule out it's a settings issue.
How about if you install with "Default installation profile"
and just activate "Users can register:" in tiki-admin.php?page=login
Maybe you could also try the same thing with Tiki 1.9.7 (http://sourceforge.net/project/showfiles.php?group_id=64258&package_id=112134) and Tiki 1.10 (http://dev.tikiwiki.org/download)