I just installed 2.6 on IIS/Apache windows/linux server without mod rewrite. Default PL work, the almost pretty index.php ones don't even after reading all the documentation, creating a php.ini and adding dummy tags/categories. The software doesn't seem terribly well tested in this area...
This is a new site, my post titles are in both English and Italian (see http://www.peteranne.it/wp) and a custom structure would be long, maybe 60-70 characters which risks getting truncated. My research suggests that although many SEOers recommend custom permalinks, Google would only boost your rating when a descriptive URL anchor link is pasted into a forum or something similar...it really doesn't seem worth the hassle. Our site pages have similar format to standard WP URLs and we are consistently on google page one...What do people think?
In the mean time I try to fix the technical problem