Hi Peter,
Well, sometimes what seems related may actually not be. Also, since this is a public ticket, we are confusing people who will be seeking for a likely answer to a similar question in the future. Think about what would happen if you had the "all links lead to 404" issue, stumbled upon this thread and saw a never-ending thread going on forever :)
Regarding your questions:
1. As written in
Joomla!'s documentation, available from the Help button in the GLobal Configuration page:
When set to Yes, Joomla! will use the mod_rewrite settings of Apache when creating search engine friendly URLs. Please note: it is advised that you do not modify any .htaccess file without an understanding of how it works. You must use the .htaccess file provided with Joomla! in order to use this setting. To use this file, rename the htaccess.txt file (found in the root directory) to .htaccess. By default, this setting is set to No.
2. As you read in the official Joomla! documentation excerpt above, if you want to use URL Rewriting you
must include the htaccess.txt code. However, if you do not understand what .htaccess does please consider turning off URL Rewriting and turning on SEF URLs. Or ask your developer to take a look. It's one of those things which if you don't understand and modify can bring down a site. Think of it as your car's ABS system; you really don't want to screw around with it unless you know what you're doing.
Nicholas K. Dionysopoulos
Lead Developer and Director
🇬🇷Greek: native 🇬🇧English: excellent 🇫🇷French: basic • 🕐 My time zone is Europe / Athens
Please keep in mind my timezone and cultural differences when reading my replies. Thank you!