I would put your forum in your Site Root, and change the Friendly URLS to "Mod Rewrite" in VB, and use the .htaccess file that is included with vbulletin, the .htaccess file should be in: "vbulletinsuite_Version_Patch_Level_#####\do_not_u pload\rewrite\apache2"
If you use Friendly URLs, your vb links will still show up as "yoursite.com/forum/name-of-category" even if you dont have vb in the Forum directory.

Then copy the .htaccess file from there, to your forum root. There is also an htaccess file in the "do_not_upload\rewrite\apache2\forum\" if you have your vb in the "Forum" directory.

This is how I have my forum setup too.

Moving your site into the root directory will kill your seo and you will pretty much lose all your indxed content as it will have different urls.

Mod rewrite urls are not really going to matter much and are not needed any more.