if you go to the global configuration page in the admin tool and pick the site tab, it should be in the upper right with the seo options. you also have to rename the htaccess.txt file as it says in the popup help message when you mouse over that option (the rewrite for apache option shown in the screenshot)

after turning on apache re-write, the problem appears to be solved.

I have the paid JoomSEF with the Virtuemart extension. When I enable SEF support in the Joomla! global configuration, clicking on the checkout button or on the items in the cart yields a 404 error. If I disable SEF support, it works fine.

i have SEF v3.7.1 and v2.0.30 of the JSEF VM extension