Create .htacess in Root or /blog?

Hi:

I’d like to create a .htaccess file, in order to update my permalinks.

My host has software (2ftp) that will make this easy — but I just want to be sure I create the file in the “right” place (so that WP creates permalinks without difficulties).

My directory tree looks like this:
root/sitename.com/blog

An earlier post here urged “leaving the original .htaccess in the root, then changing the permalinks in the admin panel — so that WP would create a new .htaccess in the /blog directory.” If that makes sense, am I correct in assuming that I first must create the .htaccess file in the ROOT?

And if that’s the case, is it enough to just create the “empty” file? Or is there code I should insert? If so, what code has proved most “robust”?

Last, when I chmod, should I change permissions at the ROOT level, the site level, or the /blog level?

Thanks for the “hand-holding.” I’m on deadline and I can’t afford a time-consuming “learning experience.” ;=)