Following the instruction/hint from michaeld at http://www.prestashop.com/forums/topic/18393-solved-move-prestashop-from-subfolder-to-root/
I figured out that it works!
In addition, if you use PrestaShop media servers, please add the rewrite, too.
Here's the complete .htaccess that works for me:
# Copy and paste the following code into the .htaccess file
# in the public_html folder of your hosting account
# make the changes to the file according to the instructions.
# Do not change this line - RewriteEngine on
RewriteEngine on
# Change yourdomain.com to be your main domain.
RewriteCond %{HTTP_HOST} ^(www.)?yourdomain.com$
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteCond %{REQUEST_URI} !^/subfolder/
# Don't change this line.
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteRule ^(.*)$ /subfolder/$1
# Change yourdomain.com to be your main domain again.
# Change 'subfolder' to be the folder you will use for your main domain
# followed by / then the main file for your site, index.php, index.html, etc.
RewriteCond %{HTTP_HOST} ^(www.)?yourdomain.com$
RewriteRule ^(/)?$ subfolder/index.php [L]
# For PrestaShop Media server #1
# Change mediaserver1.yourdomain.com to be your media server subdomain
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteCond %{HTTP_HOST} ^mediaserver1.yourdomain.com$
RewriteCond %{REQUEST_URI} !^/subfolder/.*$
RewriteRule ^(.*)$ /subfolder/$1
# For PrestaShop Media server #2
# Change mediaserver2.yourdomain.com to be your media server subdomain
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteCond %{HTTP_HOST} ^mediaserver2.yourdomain.com$
RewriteCond %{REQUEST_URI} !^/subfolder/.*$
RewriteRule ^(.*)$ /subfolder/$1
# For PrestaShop Media server #3
# Change mediaserver3.yourdomain.com to be your media server subdomain
# Change 'subfolder' to be the folder you will use for your main domain.
RewriteCond %{HTTP_HOST} ^mediaserver3.yourdomain.com$
RewriteCond %{REQUEST_URI} !^/subfolder/.*$
RewriteRule ^(.*)$ /subfolder/$1
PS: Make sure that you set Physical URL on PrestaShop BO to "/"