Using Permalinks « WordPress Codex: "For lighttpd, see below.
Mac Users running WordPress locally must edit their httpd.conf file editing the AllowOverride line to read AllowOverride All in the Directory "/Library/WebServer/Documents" host instructions. For Mac OS X 10.5.x and up this file is located in /private/etc/apache2/users/[your-username].conf, otherwise it is located at /etc/httpd/httpd.conf.
When you create or update a "pretty" permalink structure, WordPress will generate rewrite rules and attempt to insert them into the proper .htaccess file. If it can't, it will say something like You should update your .htaccess now and print out the rules for you to copy and paste into the file (put them at the end)."
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