Installing Drupal 7 for a project, received a 500 Server configuration error.
Looking in the Apache error log, I saw the error:
[Wed Jan 12 19:40:24 2011] [alert] [client xxx.xxx.xxx.xxx] /var/www/httpdocs/.htaccess: Option Multiviews not allowed here
Turns out, in the apache2 config file, the following is not sufficient in the Directory section:
AllowOverride Options FileInfo AuthConfig Limit Indexes
In particular, the MultiViews option is needed:
AllowOverride Options=All,MultiViews FileInfo AuthConfig Limit Indexes