.htaccess causing problems

OK this is the problem whenever i try to create a .htaccess file as advised here: http://codex.wordpress.org/Using_Permalinks (halfway down the page) it seems to muck up my wordpress site..

my site is situated in a sub-folder like this:
http://www.mydomain.co.uk/here

i have tried to upload the .htaccess file into the root folder (above /htdocs), the /htdocs folder itself AND the subdomain here.

each of that messes up my site and i get ‘internal server error’

what should i do ?

thanks