Updated settings so runtime directories are added to project root.

Previously the settings were configured so that runtime directories
for logs etc. were placed in a directory above the one where the
source for the site was checkout out into. That was slightly
annoying so the directories were moved down a level so they are
now created in the project root directory (where README.rst lives).
The .gitignore file was updated so the runtime directories won't
get in the way.

Also changed the development database to sqlite to avoid storing
passwords for postgresql in the settings - even if they are just
defaults.