Directory / Link Issues – Please Help, pages aren't working

I’m going to make this as simple as possible. I’m not sure exactly what’s going. I’ve read HOURS of posts on this forum and others and can’t figure out how to fix my issue.

My website is http://www.statesideeuro.com

The wordpress blog is located at http://www.statesideeuro.com/blog and it is setup this way on the admin side. Only the base blog works. If you click any of the older posts, it takes you to the homepage and not the blog. It takes you to http://www.statesideeuro.com/?p=123 and not http://www.statesideuro.com/blog/?p=123.

So I click the custom permalinks tab and type in just /blog/ and nothing happens. I get 404 errors. ALL wordpress files are at http://www.statesideeuro.com/blog on my server.

I’m also trying to setup a store, but it keeps sending it to a http://www.statesideeuro.com/?p=123 or something like that. How do I set it up so that it’s at http://www.statesideeuro.com/blog/?p=123?

I’ve tried permalinks but they just don’t make sense. I’ve tried various combo’s in the custom box but I’m not sure what I’m doing. I don’t care about pretty permalinks, I just want this stuff to work. I want to be able to look at individual archived blog posts and I want my store to work lol.

I need simple and CLEAR instructions. I’ve read posts that seem old and also assume the reader knows what he is reading. Please help!