Change the directory to
/fred

change all references to it to:
fred

all done ...

NOTE: the current version is v1.3.7.1
http://www.zen-cart.com/forum/showthread.php?t=69769

Your's is a tad older and umm ... upgrading is always a good idea ...

NOTE: v1.3.8 is coming out very, very, very, very soon ...