Edit Permalinks – version 3.5

I have tried everything, but I cannot seem to get my permalinks to work on my local server with xampp. I have set the AllowOverride to All, Option FollowSymLinks etc in htaccess file, and edited permissions on my files but nothing works! the htaccess file doesn’t seem to be generating with v 3.5 though – what happened there?

When I go to the dashboard and update the permalinks it just gives me a 500 server error. the best i got was the home page coming up and 404s on the other pages. help someone!!!