I second that - it is a security risk.

I do like both Coreolyn & Fastolfe's ideas. I am trying to organize my projects better these days but so far I keep changing my mind each time I start a new one. At least it's better than when I used to dump EVERYTHING in one folder.

My current directory plan is a bit like this:

/work/project-a/database  -  store databases in here
/work/project-a/libs      -  modules, libraries
/work/project-a/temp
/work/project-a/backups   -  archives of previous working versions
/work/project-a/webroot   -  Web folder starts here
/work/project-a/utils     -  command line utils I may need
/work/snippets            -  useful code snippets to save and reuse.
[download]

I like Fastolfe's use of a docs folder. I really, really, really should do that. Problem is, I work in a company where I'm the only guy who can 'use Perl;' - everyone else uses VB\VBScript. Maybe that's a reason TO document more?

Update: To answer ichimunki's second question, (if I understand it correctly), so long as you don't rely on anything above your project root and use relative links, then you should be able to zip up the project folder when you are ready to move from development to production, or whatever.