mt htaccess problem

Hi there, i have the standard .htaccess file as recommended for movabletype. Unfortunately, it automatically redirects urls such http://mydomain.com/foo to a 404 - even if there is a valid foo folder.

Anyone know what I need to tweak to get it to work?

## %%%%%%% Movable Type generated this part; don't remove this line! %%%%%%%
# Disable fancy indexes, so mtview.php gets a chance...
Options -Indexes +SymLinksIfOwnerMatch
<IfModule mod_rewrite.c>
# The mod_rewrite solution is the preferred way to invoke
# dynamic pages, because of its flexibility.

# Add mtview.php to the list of DirectoryIndex options, listing it last,
# so it is invoked only if the common choices aren't present...
<IfModule mod_dir.c>
DirectoryIndex index.php index.html index.htm default.htm default.html default.asp /mtview.php

</IfModule>

RewriteEngine on

# don't serve mtview.php if the request is for a real directory
# (allows the DirectoryIndex lookup to function)
RewriteCond %{REQUEST_FILENAME} !-d

# don't serve mtview.php if the request is for a real file
# (allows the actual file to be served)
RewriteCond %{REQUEST_FILENAME} !-f

# anything else is handed to mtview.php for resolution
RewriteRule ^(.*)$ /mtview.php [L,QSA]
</IfModule>