yes you can install it in a subfolder or just right into public_html---it is up to you.. If you want it in a folder you have to specify it during the install.. like./phpbb---but my suggestion is to install smf forum with tiny portal. SMF and phpbb are available in fantastico Tiny portal is a mod for smf. much better than just a forum.Download it to your computer and login to the smf admin and install it from there--choose a theme or keep the default and done.
I do not think Tinyportal is compatible with smf2. Smf 1.XX is installed in fantastico