I think this is fine if you are only testing something for a few friends. However, there is an issue with using too much bandwidth if you try to host something through your public folder that becomes too popular. As per https://www.dropbox.com/help/45:
There are currently no hard limits on
public bandwidth usage. We do,
however, have an automated system for
detecting and flagging unusual amounts
of bandwidth usage. We will send an
email notification whenever an account
is flagged. Once flagged, public links
will be temporarily disabled and users
who use the links will see an error
page instead of your file.
Best Answer
I don't think you can actually share the Public folder, just files inside it.
Drop a file into the folder, right click it → Dropbox → Copy Public Link.
If you have delete the public folder by mistaken then create new one and that's all.
One more time: Files must be in the public folder for you to share a url
You probably want to look at shared folders;
https://www.dropbox.com/help/19
Hope this helps.