Need clarification on installing site with DRUSH on localhost
Use this command to install Drupal. 

drush site-install standard --db-url="mysql://scratch:1@localhost/scratch" --account-name=scratch --account-pass=1 --account-mail="founder@satearn.com"


Note: Move to the folder drupal-7.x folder and run this command from there. This command should be run from the place where your drupal files are located. 
It would be better just to rename it drupal instead of drupal-7.x for easiness. 
I tested it right now and its working.