You need to take the index.php from the wordpress directory and put that in the root. Then you modify that index.php file like this:
Change:
PHP Code:
require('./wp-blog-header.php');
to:
PHP Code:
require('./YOUR-DIRECTORY/wp-blog-header.php');
Then in the wordpress admin you've got to go to Options and change the "Blog address" to
www.YOURDOMAIN.com.
Lifer, the 301 redirect will pass linkjuice so you don't lose ranking. It's setting up the .htaccess redirect that can be a pain in the ass.