WordPress.org

The plugin solves two problems:

1. When WordPress detects that FastCGI PHP SAPI is in use, it disregards the redirect status code passed to wp_redirect. Thus, all 301 redrects become 302 redirects which may not be good for SEO. The plugin overrides wp_redirect when it detects that nginx is used.
2. When WordPress detects that mod_rewrite is not loaded (which is the case for nginx as it does not load any Apache modules) it falls back to PATHINFO permalinks in Permalink Settings page. nginx itself has built-in support for URL rewriting and does not need PATHINFO permalinks. Thus, when the plugin detects that nginx is used, it makes WordPress think that mod_rewrite is loaded and it is OK to use pretty permalinks.

The plugin does not require any configuration. It just does its work. You won't notice it — install and forget.

WARNING: nginx must be configured properly to support permalinks.