Was thinking that it's should be a time now for me to upgrade from 1.4.6 to 1.7.7.0. Don't want to damage while 1.4.6 is still working so installed 1.7.7.0 on the different server.
Installation went smooth. Database connected no problem. Have "your installation is finished" screen with backend login and password. Removed Install folder.
When I'm trying to login to the back office by providing the login credentials and clicking "Log In" button - the picture with the credentials disappears leaving only the bird 
. No errors, no nothing. If I click refresh - I see the credentials screen again. Different browsers - same result. When I'm playing with the front end and trying to create a new customer after submitting an information browser giving me HTTP error 500. I think both those issues are connected somehow.
What am I missing?