I am having more-or-less the same issue. The last time I talked to my host about this they were sort of helpful. HOWEVER, can somebody please verify with me once and for all where the .htaccess file and php.ini file should reside?? Meaning, if for example my wp installation resides at public_html/blog on my host. I am so damn frustrated, I have put the files everywhere as my host says that they allow my to edit the php.ini. But still, I can’t even get a fresh installation of wp going, so I know it is not a plugin issue.