Dreamhost, as many other hosting services, has disabled the php function file_get_contents(), that permits to get a file from another http location.
To get the same result, but without the troubles of file_get_contents, you can use curl.
I’ve modified the InlineRSS wordpress plugin to use curl instead of file_get_contents().
You can download it on my wiki.
InlineRSS wordpress plugin without file_get_contents