500 Internal server error - STILL NOT SOLVED!

[eluser]leet_2k[/eluser]
Hi there,
I am trying to work on my wrk teams dev server.I have created a folder called abc under one of the current websites (lets call it http://abcdev.com.au/). Now I placed my CI files in the abc folder..

More info:-
==>
==>http://abcdev.com.au links to a location on server - home/folder1/public_html.
So, the location of abc is - /home/folder1/public_html/abc
==>I have been told that the server is virtual host

Now when I change the base_url to and go to http://abcdev.com.au/abc/index.php, I get the following error:-
---------------
Internal Server Error

The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator, [email protected] and inform them of the time the error occurred, and anything you might have done that may have caused the error.

More information about this error may be available in the server error log.

Additionally, a 404 Not Found error was encountered while trying to use an ErrorDocument to handle the request.
============
In my .htaccess file, I have the following:-

Code:

<IfModule mod_rewrite.c>
    RewriteEngine On
    RewriteBase /home/folder1/public_html

    #Removes access to the system folder by users.
    #Additionally this will allow you to create a System.php controller,
    #previously this would not have been possible.
    #'system' can be replaced if you have renamed your system folder.
    RewriteCond %{REQUEST_URI} ^system.*
    RewriteRule ^(.*)$ /index.php?/$1 [L]
    
    #When your application folder isn't in the system folder
    #This snippet prevents user access to the application folder
    #Submitted by: Fabdrol
    #Rename 'application' to your applications folder name.
    RewriteCond %{REQUEST_URI} ^application.*
    RewriteRule ^(.*)$ /index.php?/$1 [L]

    #Checks to see if the user is attempting to access a valid file,
    #such as an image or css document, if this isn't true it sends the
    #request to index.php
    RewriteCond %{REQUEST_FILENAME} !-f
    RewriteCond %{REQUEST_FILENAME} !-d
    RewriteRule ^(.*)$ index.php?/$1 [L]
</IfModule>

<IfModule !mod_rewrite.c>
    # If we don't have mod_rewrite installed, all 404's
    # can be sent to index.php, and everything works as normal.
    # Submitted by: ElliotHaughin

    ErrorDocument 404 /index.php
</IfModule>  

<VirtualHost *>
        ServerName abcdev.com.au/
        DocumentRoot /home/folder1/public_html/abc
        <Directory /home/folder1/public_html/abc>
                RewriteEngine On
                RewriteBase /
                RewriteCond %{REQUEST_FILENAME} !-f
                RewriteCond %{REQUEST_FILENAME} !-d
                RewriteRule ^(.*)$ index.php/$1 [L]
        </Directory>
</VirtualHost>

============
If I put a .html page and access it thru http://abcdev.com.au/abc/index.html, I get the page.

Please help (Please be clear on the instructions too. Thanks),
leet_2k