many Magento users try the application out first on sub-directory or test directory. A lot of times, moving an application from test directory to live directory can be hectic and time-consuming. Luckily, it is relatively easy to move Magento from one directory to another withing the same server.
This procedure should work in both ways:
when you move Magento from sub-directory to top as ‘http://www.mycompany.com/test/’ to ‘http://www.mycompany.com/’
or from top to sub-directory as ‘http://www.mycompany.com/’ to ‘http://www.mycompany.com/shop/’.
i did the following to solve this problem:
1) Take a backup of the file /downloader/pearlib/pear.ini
2) Delete (or rename) pear.ini
3) Go to Magento connect manager – the settings are resteted back to “stable”, change it to beta and press save. A new pear.ini file should now be created with the correct path.