1. As the error states "This error can be caused by a virtual directory not being configured as an application in IIS." The sub folder where you installed mojoPortal needs to be configured as an application in IIS
2. If there is something else installed in the root site that also has a web.config file it may cause conflicts. Ideally, remove any other web.config files that may exist in fodlers above the folder where mojoportal is installed. If you cannot do that then you will have to try to mitigate the problems. There is information and links about how to do this in our developer FAQ.
3. If you have your own server there is no reason that you must install it as a sub folder. When people say that it usually means they don't know how to setup a another root IIS web site without breaking the default web site so they install everything under the default web site instead.