Hi, I am trying to install apian 7.8 on my local machine. I have 8 GB

Looking at the server.log, the caused by for the exception in the stack trace is:

Caused by: liquibase.exception.LockException: liquibase.exception.DatabaseException: Error executing SQL CREATE TABLE `DATABASECHANGELOGLOCK` (`ID` INT NOT NULL, `LOCKED` TINYINT(1) NOT NULL, `LOCKGRANTED` DATETIME, `LOCKEDBY` VARCHAR(255), CONSTRAINT `PK_DATABASECHANGELOGLOCK` PRIMARY KEY (`ID`)); on jdbc:mysql://localhost:3306/appian72primaryINSERT INTO `DATABASECHANGELOGLOCK` (`ID`, `LOCKED`) VALUES (1, 0): Cannot execute statement: impossible to write to binary log since BINLOG_FORMAT = STATEMENT and at least one table uses a storage engine limited to row-based logging. InnoDB is limited to row-logging when transaction isolation level is READ COMMITTED or READ UNCOMMITTED.
...
Caused by: liquibase.exception.DatabaseException: Error executing SQL CREATE TABLE `DATABASECHANGELOGLOCK` (`ID` INT NOT NULL, `LOCKED` TINYINT(1) NOT NULL, `LOCKGRANTED` DATETIME, `LOCKEDBY` VARCHAR(255), CONSTRAINT `PK_DATABASECHANGELOGLOCK` PRIMARY KEY (`ID`)); on jdbc:mysql://localhost:3306/appian72primaryINSERT INTO `DATABASECHANGELOGLOCK` (`ID`, `LOCKED`) VALUES (1, 0): Cannot execute statement: impossible to write to binary log since BINLOG_FORMAT = STATEMENT and at least one table uses a storage engine limited to row-based logging. InnoDB is limited to row-logging when transaction isolation level is READ COMMITTED or READ UNCOMMITTED.
...
Caused by: java.sql.SQLException: Cannot execute statement: impossible to write to binary log since BINLOG_FORMAT = STATEMENT and at least one table uses a storage engine limited to row-based logging. InnoDB is limited to row-logging when transaction isolation level is READ COMMITTED or READ UNCOMMITTED.

Could you try chaning the Binary Log format for your MySQL Server to Mixed and then restart the App-server?
dev.mysql.com/.../binary-log-setting.html

Did set GLOBAL binlog_format = 'MIXED' ......but still keep getting errors....I closed out of everything and started from the beginning...but still fails....Attaching server-log file...

server-log.txt

It looks like it failed with a different exception.

Caused by: DataSourceConnectionException[jdbc/AppianPrimaryDS]: FATAL: The primary datasource cannot be reached. Access to the primary datasource is required. The Appian application will fail to deploy. Details: Unable to build EntityManagerFactory (APNX-1-4179-002)
...
Caused by: javax.persistence.PersistenceException: Unable to build EntityManagerFactory
...
Caused by: org.hibernate.HibernateException: Cannot connect to the database.
...
Caused by: org.hibernate.HibernateException: 'hibernate.dialect' must be set when no Connection available

Can you also attach your appian-ds.xml? (Before you proceed with this please ensure that you PURGE any sensitive data in the *-ds.xml file)

attaching apian-ds.xml....no sensitive data inside....just providing database name....that's it...

appian-ds.xml

Looking at the logs again, it seems like there is a nullPointerException, when it tries to call the getConnection method.

17:31:34,511 INFO [stdout] (ServerService Thread Pool -- 52) 2015-06-17 17:31:34,510 [ServerService Thread Pool -- 52] INFO com.appiancorp.rdbms.config.PrimaryDataSourceConfig - Validating and initializing the primary data source: jdbc/AppianPrimaryDS17:31:35,100 WARN [org.jboss.jca.core.connectionmanager.pool.strategy.PoolBySubject] (ServerService Thread Pool -- 52) IJ000604: Throwable while attempting to get a new connection: null: javax.resource.ResourceException: Could not create connection
...
Caused by: java.lang.NullPointerException
          at com.mysql.jdbc.jdbc2.optional.MysqlDataSource.getConnection(MysqlDataSource.java:429) [mysql-connector-java-5.1.31-bin.jar:]

Can you try to replace:
<xa-datasource-property name="URL">jdbc:mysql://yourserver.example.com:3306/your_db_name?useOldAliasMetadataBehavior=true</xa-datasource-property>

with:
<xa-datasource-property name="serverName">such_as_server.example.com</xa-datasource-property>
<xa-datasource-property name="portNumber">3306</xa-datasource-property>
<xa-datasource-property name="databaseName">such_as_mySQL_for_appian</xa-datasource-property>

Test it out, if it works.

Looking at the most recent version of your log I see the root cause is:

Caused by: java.lang.IllegalStateException: [jdbc/AppianPrimaryDS] The schema is invalid.
...
Caused by: org.hibernate.HibernateException: Missing table: DT_MODEL

It seems that Appian thinks that it should have already created the tables but they are not visible therefore it doesn't try to create them again.

1. Are the tables there? (SELECT * FROM DT_MODEL)
2. Did you change the user in ds-name-security-primary at some point? Maybe the tables were created with one account then the user changed in ds-name-security-primary and this new account doesn't have access to see those tables?
3. Appian knows whether it created the tables already by populating the changelog table, if your changelog's are marked as executed then the tables won't be created again and Appian will try to find them.

If you can't guarantee the tables are not there, simply drop the never-used primary DS and create an empty one with the same name then restart JBoss.

I started from the beginning again. Deleted the schemas and added new schemas....installed Appian 7.8 on a different directory. Used configuration manager....did hotfix E. since I am using the new jboss and java 8....but this time getting different errors....some classes don't seem to be there....Attaching server.log...

server-latest.txt

I suggest you stop everything and re-apply Hotfix E. It seems the hotfix wasn't deployed properly and you have duplicate JARs

The instructions explain you need to delete some JARs before deploying the hotfix. Your environment has a class loader issue due to the improper deployment of the hotfix.

Search for "Installation" in the following link for instructions forum.appian.com/.../Hotfixes.html

I deleted all jar files except for the fact that most of them have a 2.0 extension instead of 1.0 as mentioned in the forum. All instructions in the hotfix E has been followed correctly except for that fact. Still I am not able to load jboss successfully. Please advise. Attached is the new server log...

server-latest2.txt