I said... That's not the right way to do it. Because of the standard WP .htaccess rules, any 404 errors are handled by the WordPress system so your server will never see yur additional 404 document.
To set it up, look at what's in your current 404.php file in your theme. In there there will be a few checks, and some code to display whatever error notice that there is now. My suggestion was to use some of the WP functions to check what the user expected and display content based on that. It will take a bit of programming still, and a few trial and error attempts because you'll always figure out something that's not owrking quite the way that you wanted it to.