I was beating my head up against this as well. I’m also installing Code Igniter.
The goocher was no RewriteBase. Here’s my .htaccess:
DirectoryIndex index.php
RewriteEngine on
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteCond $1 !^(index\.php|robots\.txt)
RewriteRule ^(.*)$ index.php?/$1 [L]