Seemed to work with the following config options (see Admin|config): CGI: yes; mimetex page: ../../cgi-bin/mimetex.cgi.
When the novelty of mimetex wears off, give MathTex a try. Uses LaTeX directly, for that full typesetting flavour.
29/9/8: trying to install it was a bitch. No prerequisites seemed available. Might be better asking for a kermit to do it.