Is this damaging - or better?

I am not using a .htaccess file in my classifieds directory. I am calling vbseo though and it is all working as expected. (I did have to create a custom footer to include your copyright however.)

Here is the real question. Without the .htaccess file, everything in my classifieds, minus the homepage, is displayed as a top level file. I would think this is good since it isn't buried in any structure.

Here is an example:
Actual Location:

Code:

mysite.com/classifieds/file-name-here-id.html

is being displayed as:
Displayed Location:

Code:

mysite.com/file-name-here-id.html

This is happening for everything except the homepage. I want to leave it like this, but not if it will have a negative affect on indexing. I am guessing it would have a positive affect, but I want to make certain I am not mistaken. (I can easily have it include the directory, that isn't an issue.) I just want to know if I should include the directory or not. lol

You do not want to have more than one path to the same resource. That is the idea of link consensus and it is very important.