I have volunteered to build a community-based site for an organization that does not have their on server hosting plan yet. 1)Can I build a test site on my server/hosting plan that I already run my personal site on then transfer the test site to the new server once it is established? 2) And can I build the test site on my server in a subdirectory without disturbing my personal website 3) Finally, is this a "relatively" easy thing to do?

once you have a new host you can upload the files and then create a database. edit your mainfile.php to reflect new path and database. use phpmyadmin to upload tables. you will have to make a copy of your database. you can use a module called backup 2.20. download here: http://www.nagl.ch/modules/mydownloads/

I wasn;t clear on what you are about to do..
Its very confusing on how you explain it.

If you own a server/hosting plan, you can basicly create subdomain as your test site. From There u can install and test your xoops.

This won't interfere with the existing domain of yours.

If you are done with the testing, you can move XOops basiclly anywhere with just few configurations on the mainfile.php

Open up mainfile.php and u see whats inside and you will get the idea of it. You might also need to deal with the SQL database.

anyway good luck

do a search if you are confused, there is a number of posts on this topic.