Mike Schroder on "[Plugin: Multi Feed Reader] php 5.3 is installed despite error"

Try going into your DreamHost panel, to "Manage Domains", then click "edit" by the domain you want to install it on.

Scroll down, and you can change PHP from 5.2.x to 5.3.x (FastCGI preferred).

Then, save your settings, and in about 5-15 minutes, you should be using PHP 5.3.x, and the plugin should detect it appropriately.