it's most convenient to install DotNetNuke in the root of the web site, unfortunately some hosters doesn't allow this.

If your host allows it, you can set IIS path for the domain to point to a subfolder of the root as the main path, then that path does not show up in the url.  I do that with my install, DNN is in a subfolder, but that subfolder is not part of the domain url.  At one time, I had DNN in the root folder, and it really didn't affect anything.  The only issue might be if you wanted to install some other asp.net script/project with a different domain name or possibly as a sub-domain and with DNN already in the root, it could cause conflict with web.config files between the two projects, etc. if you were just dropping all the asp.net apps into the root.  So, if you plan to expand or want to keep options open, I'd go with a subfolder.  Other than that, and aside from some web hosts not allowing root installs, there really isn't any reason for one location being better than another, and there's no reason the subfolder has to be part of the domain url if you have IIS set properly to point to the subfolder as the application's root path (intranet might be a different story depending on how it's deployed).  There is a section in the web.config that also can be used to strip subfolder from domain url, but I've never tried it on my localhost test sites that don't use IIS, so I'm not sure how well that works.

JOHN GIESY
DotNetNuke Hosting Expert

DotNetNuke 7 Hosting $70 /year
DNN4Less.com Team DotNetNuke