I'm not seeing a specific question here - the general answers we have were already posted in this thread.
Once again, as I understand things - the real issue is that when webdav is used the files and directories have to be owned by the server for it to properly manage the files and directories. This means, although they are protected that on disk they aren't actually owned by your user(s). If you were to log on through a shell (ssh) you would not be able to go to the directory and look/move/rename them as they are not owned by you.
I could be wrong and someone could cruise by and drop a bomb and straighten this out, but I'm pretty sure this is correct.
What you might want to do, as I have done, is set up a subdomain (since they're FREE) and enable webdav on that domain. That way you can store the files there and still host a site on your main domain.
Point them at different directories (preferably not under eath other) and you should be able to use webdav all you want and put web files (.html/.php) in your main domain for display.
Hope this helps at all!
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