When you start xterm, you should be in /home/user or the equivalent on the n900. Change to .mlb with:

cd .mlb

Look at the config file.

cat config

Make sure your user and pass are what you think they are.
Make sure mobile=1

Are there any non-alpha characters in your password?
My password contains letters, numbers and a period, that works ok.

mediaplayer should be fine to use, but we aren't getting that far yet.