Drupal doesn't detect my MySQL installation Does Drupal 7 use some special libraries for MySQL?
I tried to install the 7.8 version, and the only option for the database I have is "SQLite."

I am running Drupal 6 on the same server, and it works fine.
I am using PHP 5.2.8, and MySQL 5.1.38.

Do I need any additional library?
You need to have the PDO driver for MySQL installed for Drupal 7. This is indeed different from Drupal 6. Instructions are at http://drupal.org/requirements/pdo. I hope those instructions are sufficient for you.