OMX:

If I upload the site into its own separate folder I get a command box asking me to enter username and password.

You probably have Basic or Integrated Windows Authentication enabled on that web site.  Typically you would not use either.  To remove it:

1.  Login to DNP (your Control Panel)

2.  Go to Websites > yourdomain.com.ultimahosts.eu

3.  This brings you to the Web site properties.  At the bottom of the page is a section titled "Authentication".  Only the 1st checkbox should be checked (Allow Anonymous Access).  Uncheck the other two if either are checked.

4.  Save your changes, then try viewing your site again.