The red X will appear if there is less than 1 GB of free space on the server.
This is intended to warn you that you're in a potentially limited situation.
Zen Cart will operate quite happily with
- 15 MB of disk space for PHP files
- PLUS however much space your product images consume
- PLUS however much data you enter into your online store's database.
(The database starts at about 500 to 1000 MB depending on whether you install the demo products.)
So, the 400 MB you're reporting ... is a bit limiting if it includes database disk space. If database space is calculated separately, you should have no problem.
Zen Cart cannot determine whether database space is included in the reported "disk space" results. It simply raises the flag if there's a potential risk of surprises in this area.