Issue above is solved - I needed to export BE as WAP and to upload it that way on the internet.
Everything went smooth, I just followed instructions from here:
But now there are several new issues:
1. First error I got is:
"The directory '/BlogEngine/' is not allowed because the application is precompiled."
I changed the name of "App_GlobalResources" folder and this error was gone.
2. Now only a blank page was displayed with nothing in the source view.
3. I tried navigating to the "/BlogEngine/Default.aspx" page but then I received XML parsing error.
"XML Parsing Error: no element found
Line Number 1, Column 1:"
Any help will be much appriciated