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I run mandrake(8.0) and my webserver root is /var/www/html
so therefore your default_pref file has to be within there somewhere.

Here is how I do it, I have http://diginux.net/mail has my web-based email
(which is currently disabled). So therefore the corresponding directory
is /var/www/html/mail (which is the base directory for squirrelmail). So
my data files are located at /var/www/html/mail/data/default_pref

This is just from memory since I did it awhile ago. I hope it helps.

-Jordan Wilberding