1and1.com allows you to do that. You can point any domain or subdomain to any folder in your webspace. In my opinion 1and1 it is an excellent host, but the only thing that annoys me is the "Service Unavailable" messages that come up occasionally. Though that could be just my particular package and/or server...
Ahh I remember something now, I think I know why your guys host's let you do this, I was talking to a hostgator admin and he said (if your using cPanel ) you can't change the webroot because of the way cPanel is coded.
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