yes i renamed htaccess.txt to .htaccess

I'm sorry, but in this case I cannot offer you any more help, since this is not a problem with JoomSEF, but with your server configuration. You can find plenty of resources regarding the mod_rewrite module for apache on the internet.
Or you can by our support time at www.artio.net/e-shop/support-services and we could set the server for you, however if it's a local server, there would probably be a problem for us connecting to it.

Best regards,
ARTIO Support Team