I've recently installed the W3 Total Cache Plug-in.. everything was fine except I came across this error message..
It appears Page Cache URL rewriting is not working. If using apache, verify that the server configuration allows .htaccess or if using nginx verify all configuration files are included in the configuration.
and.. it was preventing my blog posts to cached (I tested it with a website speed tester..)
So I goggled, and landed on this thread..
It is now closed and no one seems to have a real solution.. So I decided to come on here and tell you guys how I fixed it..
I have another wordpress blog and I installed W3TC on that one and that error message did not appear. So all I did was copy the .htaccess code from the working blog and pasted into the one that is not working with a few edits..
Here is the code from the working blog..
Copy that code into your non-W3TC working blog's .htaccess and look for "yourwebsite.com" lines (there should be 2) and replace it with your website's name.. Ex. Your website is yahoo.com you would replace "yourwebsite.com" with "yahoo.com".. Save everything and now go configure your W3TC Settings and it should work..
I really hope this helps!