I contacted Dreamhost support and thye suggested I try the following option. (how can I do this without messing up:
FAQ10 in part: If you are not using Apache 2 and you still have this problem (unlikely) then you can switch Moodle to use an alternative method. The disadvantages are a slight loss of performance for your users and you won't be able to use relative links within HTML resources.
To use this alternative method, you should change the slasharguments variable in the Operating System section of Administration Configuration Variables. You should now be able to access your uploaded files.
Dreamhost answer: Your uladh.com domain is on an Apache 1.33 service, not an Apache 2 service, so per their notes the .htaccess solution would not work.
I would not be surprised if our default configuration for all versions disallowed this from a security standpoint: if this were enabled, someone could theoretically download any file on your website (including configuration files with database connection info, script files, etc.) by changing the URL to include the correct filename. And that's the least of the potential vulnerabilities by allowing script parameters to be piped dynamically via a URL. Unless Moodle includes a specific safeguard so that only benign files (such as jpegs) can be downloaded in this manner, then this would present a question about security -- I'm not familiar enough with Moodle's actual code to tell whether or not this would be the case.
I would recommend using the alternate solution they offered via the Moodle admin panel.