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Hi,
For most webhosting packages, your html/php/xoops files will reside in a folder called something like:
xxxxx/home/htdocs
The warning message is saying that, in order to be safer, your xoops_lib and xoops_data folders (and subdirectories) should be in a different directory and preferebly one that can't be read by others, e.g.
xxxxx/home
If you can, move these directories there and edit mainfile.php to reflect the change.
However, with some hosting you are not allowed to access this directory yourself.