I am following the examples here http://wiki.dreamhost.com/Git
Basically I want to create a git repo i can push to on a server from my desktop... On host:
What you see seems correct. The .git files you see in that folder (and a lot of it in the objects directory) contains all your git repository.
When you make a "bare" repository, this prevents anybody else to edit the files directly there (on your host machine), not having the project checked out with all your source file is one of the thing that would prevent such editing.