Enabling safe_mode is not needed if other reasonable security precautions are followed. Using safe_mode for web site security is a poor compromise in a bad situation. It may make sense in some situations, but there is almost always a better way. Because safe_mode in some sense only gives the illusion of safety, it will be removed from PHP starting with version 6.0.
The Joomla! core works fine with or without PHP safe_mode. The one exception to this rule is the installation script. This is because safe_mode, by design, turns off the PHP functions that enable easy uploading via a Web browser. If you do use safe_mode, and need to perform installs via the Web browser, temporarily turn safe_mode OFF, and turn it back ON when finished.
Some third-party extensions may require the specific PHP functions that are blocked by safe_mode. Such extensions should be carefully evaluated to be sure you understand exactly why they require such powerful and potentially dangerous functions.
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