.htaccess leads to 403 forbidden

I can go through the process fairly effortlessly, and it will create the correct linking structure, but after the .htaccess is created, I get a 403 forbidden error for everything in that directory. I know that it has something to do with the .htaccess file because I can remove it and the problem goes away.

How does WP handle such URL rewrites, and is there any way to modify that? This is what it gives me:

# BEGIN WordPress

<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /wordpress/
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /wordpress/index.php [L]
</IfModule>

# END WordPress