There is another option to itdamagers htaccess. Not to put down his htaccess, it worked great for me to a point, the last time I upgraded the htaccess broke and I had to either fix it, or fix the one that is bundled with WPMU, I ended up fixing the bundled htaccess.
Fixing the errors with the htaccess that comes with WPMU was fairly simple, I was having problems with
1. Images
2. Comments
This was easily fixed,
Images: add this line
RewriteRule ^files/(.*) /wp-inst/wp-content/blogs.php?file=$1 [L]
I added it right before this
# rewrite these
Comments:
Find this
# We want to pass these files straight through
RewriteRule ^([_0-9a-zA-Z-]+)/wp-comments-post.php(.*) BASE/wp-inst/wp-comments-post.php [L]
And change it to look like this.
# We want to pass these files straight through
RewriteRule ^wp-comments-post.php /wp-inst/wp-comments-post.php [L]
Also, just an fyi, I managed to integrate Falbum with this htaccess, all that was needed was to add the falbum. First it needs to be near the top of the htaccess, in my example below I included the wpmu htaccess above and below the falbum stuff just to give an idea of where i placed it. You should also notice that /wp-inst/ was added into the falbum line, wont work without it, you will also notice that we called our falbum page "gallery" you can call it whatever you want when you set it up.
htaccess looks like...
# Rewrite http://www.domain.com to domain.com
RewriteCond %{HTTP_HOST} ^www.(.*)
RewriteRule ^(.*) http://%1/$1 [R,L]
#Falbum
RewriteRule ^gallery/?([^/]*)?/?([^/]*)?/?([^/]*)?/?([^/]*)?/?([^/]*)?/?([^/]*)?/?([^/]*)?/?([^/]*)?/?$ /wp-inst/wp-content/plugins/falbum/wp/album.php?$1=$2&$3=$4&$5=$6&$7=$8 [QSA,L]
###
#### blogs
###
signing off