Totals 2.1 is a huge step forward. We changed the data structure (all little bit) and made Totals compatible with Mountain Lions sandbox. We removed the need of a database folder, the folder where one can store the database files, instead we introduced a totally document based application, like Numbers and Pages. Double-click a database file will open it in Totals. Also you can move the file wherever you want.
If you upgrade from Totals 2.0.x to 2.1, you will notice that Totals asks for a database file and for a folder to save the backup files when you start it for the first time. This is totally normal and is necessary to run in a sandboxed environment. All database files and folders are initially not accessible for Totals unless you select them manually within the application. This is why it will ask you for a database file and auto-backup folder