Preferred location for home dirs and website access

I'm an Open Directory/LDAP newbie, so please bear with me.
I've successfully setup a machine running Tiger Server as an Open Directory Master and providing other services like FTP and Web Hosting. I've been able to create a user home directory and then from a client computer, I have successfully bound to the Tiger Server and logged in using remote authentication. I have two questions from this point on:
1) I've placed the user home directory on the server in /Shared/UserHomeDirs/testuser. (UserHomeDirs) is a directory I created to house all the various user home directories. Is there a preferred place for storing user home directories. I assume it is not in /Users since that is for local user accounts?
2) We are a small web development shop and we normally develop sites in a local /Users/username/Sites directory. When I attempt to access the same folder using a browser- http://xxx.xxx.xxx.xxx/~testuser/, I am forbidden access. If I access any subdirectory within, the browser downloads a file rather than showing the contents of the directory or rendering the relevant html/php index file. What's going on here? Is this related to permissions or to where I've place the user home directories on the server?
Thanks for any help/suggestions,
Ben

/Users doesn't have to be for local users. If you share it out on the network, and enable it "for user home directories," then you have a network share point. Pretty simple.
Best practices vary here. You can have user home directories on the /Users map point of your OD server if you're a really small shop, but mid-large shops will have a separate server runnign AFP for sharing home directories, just because more servers = more bandwidth and less CPU load. I'd say for < 25 users, putting the OD master and AFP home share point is fine. Especially if you're using portable homes, as that reduces used bandwidth significantly.

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