There is an existing server installation guide made by Diconfrost VaNz on this topic but this is outdated. So let me give ample time to share my experience on how to install Hercules SVN on your local machine.
1. To obtain hercules, refer to Ind's topic
2. Go to conf/char-server.conf and look for the code below :
// Server Communication username and password.userid: s1passwd: p1
Set s1 and p1 to anything you want but take note of them as you will use them later on when you move to SQL