Like Cattykool, I also have problem with
getting permalinks to work.
I tried a couple of options, the links are changed to the more SE friendly style BUT the page is not found on server :(
I changed my .htaccess file to 777 as well - but WP still thinks it can not get access - so I updated the file manually BUT
It still doesn't work :(
Would be great if someone could help on this.