.htaccess problems

<Hello everyone. I am sorry for posting this same issue again but I have tried everything I could possibily think of as well as most of the related issues posted in this forum. Let me explain what I did. I created a htaccess.txt file and uploaded it to my web site in the gallery folder. I changed the permissions to allow 777. and I ended up with the error below. I have also tried uploading a .htaccess.txt and setting the 777 permission and same error. I am not doing a update this is a fresh install of the latest version of Gallery. I have Gallery installed in my Modules folder (PHPNUKE) Any ideas?
4 errors. Details below.

Error: You must create empty file .htaccess and chmod it 777 before proceeding. See [documentation] for more details.
/* Version */$gallery->app->config_version = '80'; /* Features */$gallery->app->feature["zip"] = 1;
$gallery->app->feature["rewrite"] = 1;
$gallery->app->feature["mirror"] = 0; // (missing mirrorSites -- it's optional)
/* Constants */>
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