I have a similar setup as described in this topic with WP 3 with MultiSite enabled.
I get errors about W3 Total Cache not being able to write to .htaccess, even though all permissions are given:
Browser Cache feature is not operational. Your .htaccess rules could not be modified. Please verify /home/[full WP Path]/.htaccess has the following rules: […]
I also get:
The required directives for fancy permalinks could not be detected, please confirm they are available: […]
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