Hi koomar,
I had the same problem as yours, and when I contacted Byethost free hosting support, they said it's impossible to write files outside their htdocs folder.
So what I did instead, is the following:
1. Install elgg in a subdirectory within the byethost's htdocs folder (i.e. in /htdocs/elgg)
2. Create the data directory within the the htdocs folder (i.e. in /htdocs/elgg-data)
3. Configure .htaccess in /htdocs/elgg and uncomment the RewriteBase line, so that the URL Rewrites will work properly.
4. Protect your elgg-data from unauthorized access! Create an .htaccess file within /htdocs/elgg-data so it contains the following:
Order deny,allow
Deny from all
That will protect elgg-data from being accessed from the browser.
You will now be able to access the elgg site at http://site.at.byethost.com/elgg.
Now, what if they access http://site.at.byethost.com (without the /elgg)? It's pretty simple.
Create an .htaccess file within /htdocs containing the following:
DirectoryIndex elgg/index.php
So that when you access the site without /elgg, it automatically redirects to the /elgg.
Just sharing what I did to make it work, and hope it helps.
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