I can't change permalink?

Hello,

For some reason I can’t change post permalink.

1. I click edit and change the permalink
2. Click okay, it changes
3. Update the page. After the update, the permalink is back to the old

The problem is not that I would have same name post in the trash. I emptied the trash and tried some weird names.

I have a .htaccess file in the very root directory where the index.php is. Then I have WP installed on subdirectory. Should I also have .htaccess file in the subdirectory?

Here’s the root .htaccess:

AddHandler php5-script .php

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress

All help is welcome and appreciated ??