Pretty permalinks not working

I created a client’s blog at http://keithflynn.net and everything works fine except when I switch to pretty permalinks. I checked the .htaccess file which is getting created (its code is below):

# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

# END WordPress

This has happened with another blog I created but not on the other blogs I have. Could it be an issue outside of WP? I would appreciate any help on what to do next.

Thanks. Peace.