how do you really remove index.php

[eluser]bpdp[/eluser]
Okay so I've been at it for several days now and I just can't seem to remove the index.php from my urls.

• mod_rewrite is enabled
• apache has been configured to allow .htaccess overrides (other 301 redirects are working)
• $config['index_page'] = "";
• $config['uri_protocol'] = "AUTO"; (I have tried with other settings)
• I followed these instructions to setup my .htaccess file.

I am assuming that my issue is a path issue. I have the default CI install inside a project folder so my structure looks like this:
- localhost
- freelance
- ps
.htaccess
index.php
- system

any insight would be helpful, thank you!