You can check the current status in Joomla! Administrator, under Site - System Information - PHP Information (example from 2.5)
Find your php.ini file (search for php.ini in the PHP Information page, it should be under Loaded Configuration File), make a backup and then add the following line (adapted to your current needs; don't forget to remove the comment sign ;
before open_basedir):
open_basedir = /home/users/you/public_html
Restart your web server (probably Apache).
Now in Joomla! you should see the a value for open_basedir
.
Make sure you test your Joomla! installation by trying some basic tasks, including updating an extension or installing a new one.
More documentation can be found here: