Trouble installing in root folder – getting file_exists warning

I tried to do a fresh install in the root directory and got this error:

Warning: file_exists() [function.file-exists]: open_basedir restriction in effect.

I could see the admin user interface, but not the site. The weird thing to me is that I had the site installed and working fine in a subfolder (just one folder down from the root).

Any ideas would be helpful