It is technically "correct", but you should not use it.
The ".blah" parth of the path is a dataglob, which is subject to change by DreamHost as they arrange clusters and servers. If you use it in your path, should such a change occur, your site would break. If you just use the "/home/myname/domain.com" path (ignoring the dataglob altogether), it won't make any difference if DreamHost changes it (A link is created at /home/username to /home/.dataglob/username).
How you fix it depends upon where you are in the Joomla! install process. You can change it when you first install Joomla! or, if you missed that (it's an ajaxy "advanced" setting thing that is easy to overlook, IIRC), you can change it directly by editing the Joomla! config file on your server.