2
You can move the contents of the XOOPS folder up one level to the root, and change the values for XOOPS_ROOT_PATH and XOOPS_URL in mainfile.php.
Personally, I think it's cleaner to keep XOOPS in a subdirectory, and add a redirection file index.php in the root directory:
header('Location:
http://example.com/xoops/');
?>