What I discovered was that you have to tell Apache to allow the .htaccess file to override the default behavior. Here is an example. My blog in is in /var/www/kblog, so the relevant chunk of httpd.conf is:
<Directory /var/www/kblog/>
Options Indexes Includes FollowSymLinks Multiviews
AllowOverride All
Order allow,deny
Allow from all
</Directory>
Perhaps that helps? Maybe not. Worth a shot, eh?
