.htaccess will not work

I keep getting the following error message when I try to complete the config. Error: File .htaccess is not writable by the webserver - chmod it 777 before proceeding.

I take a htaccess.txt file, copy it to the web server into the gallery folder (which is in the root folder), chmod 777, rename it to .htaccess but this does not fix the issue. I can click view to open the file while it is on the web server (of course it is empty but it is there) When logging out/in and usint -la to view hidden files, the file does not show up.

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Give us your Gallery/webserver information to get a faster answer.
Get this information from the PHP diagnostic (in the configuration wizard).
Gallery version: 1.4.4
Apache version: Apache Version Apache/1.3.31 (Unix) PHP/4.3.6 mod_ssl/2.8.18 OpenSSL/0.9.6b FrontPage/5.0.2.2635 mod_throttle/3.1.2
Apache Release 10329100
Apache API Version 19990320
PHP version (4.3.6):
Graphics Toolkit:
Operating system: Linux
Web browser/version (NA):