yes, you can turn safemode off for a site, and it should only be done that way.
The main safemode should always remain on. If it were off, and you have hosted some sites, then this could happen.
Say you have foo.com and bar.com hosted. foo's siteid is 1 and bar's siteid is 2. If safemode was off for the whole server, and foo.com had vb installed, or anyother script, bar.com could issue this in a script "include("/home/virtual/site
1/fst/var/www/html/forums/admin/config.php");" which is actually including foo.com's vb config file. They would actually be able to include files from anywhere on the server.
So yea, you can turn it off for only one site, and thats how i do it.
As I stated, if you have more users in ssh, besides root, and this bot were poorly placed, they could easily issue "./ircbot (-s -d -j -v -c -i -r)". So I guess it doesn't have to be in /usr/local, but it is the safest place for it to go.