I read moodles documentation where it says that if the data root directory has to be in the site's public html folder ( Please see that i can not create it outside it since i dont have sufficient privileges as i am using a free account ). then you have to chmod it to 770 and also use htaccess to protect it. Now i am creating the moodle inside my domain at folder /moodle/ and moodle uploads folder is /moodle-uploads/uploads/ and i have an .htaccess setup in /moodle-uploads/.htaccess where its contents are
order deny,allow
deny from all
as specified on http://docs.moodle.org/20/en/Creating_Moodle_site_data_directory
But still when i run the auto installer script it says the data root directory is not secure