1> You shouldn't run IRC as root but a normal user because there is no reason to run IRC with elevated privileges. It's more secure to keep processes off the root account unless really needed. IRC really doesn't need it.
2> You can try: ./Config -nocache and let the path questions be default as they are. Then make.
The default paths will be something like:
What directory are all the server configuration files in?
[/home/user/Unreal3.2] ->
What is the path to the ircd binary including the name of the binary?
[/home/user/Unreal3.2/src/ircd] ->
Both these paths are perfectly acceptable and work out of the box.