This isn’t really an error, more a warning that the setting isn’t optimal from a security perspective. Joomla should still function fine despite the warning.
DreamHosts default PHP4 install has register_globals set to ON, while the DreamHost default PHP5 install has register_globals set to OFF, so a simple fix would be to set your domain to use PHP5.
However, setting your domain to PHP5 will more than likely cause Joomla to warn you about the magic_quotes_gpc setting, but I believe this is a less severe security risk than register_globals being ON.
You can change the magic_quotes_gpc setting for PHP 5 or the register_globals setting for PHP4, but this involves copying the default DreamHost PHP executable and php.ini files to your domain, configuring your .htaccess file to use this local install then modifying the required php.ini settings. The general procedure is detailed in the wiki article linked below, but I should warn you that the procedure does require a fairly good working knowledge of the shell etc.
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