Import Plugin not working

Hi,
I recently installed WordPress on site hosted by GoDaddy. To provide the client the ability to see the site before “going live”, I installed it in a subdirectory one level down below root. I made sure the wp-config file reflected the appropriate connections to my MySQL database, etc.

All seemed fine until I attempted to import the xml file I exported from my local BitNami-driven WordPress test site. First, attempting to install the WordPress importer plugin at the newly installed Go Daddy site produced repeated blank white screens. I was also unable to delete two inactive plugins; attempting to do so produced the blank white screen as well.

After copying the installer plugin folder from my local site to the GoDaddy site, I then saw the plugin enable link in the dashboard, but attempting to enable the plugin then produced an error saying WordPress was unable to write to a subdirectory inside the GoDaddy file structure.

Two questions:
1. Is it reasonable to install WordPress below root level, and is it simply a matter of moving all files up to root when ready to go live?

2. Any idea what’s preventing the installation of the WordPress import plugin?

Many thanks,
-pete