Help setting up CodeIgniter

[eluser]noob[/eluser]
Hello,
I am trying to setup codeigniter on my computer by following the user guide. But I must be doing something wrong. I am getting the 404 error with the hello world example.
I unzipped codeigniter and put the CodeIgniter_1.6.1 folder in my webroot folder.
I renamed the folder CodeIgniter.
Went into CodeIgniter/system/application/config/cofig.php and made sure that the following line is set: $config['base_url'] = "http://127.0.0.1/CodeIgniter/"
Then I placed the following code in CodeIgniter/system/application/controllers and named it blog.php

Code:

<?php
class Blog extends Controller {

    function index()
    {
        echo 'Hello world!';
    }
}
?>

And afterwards when I go to http://127.0.0.1/CodeIgniter/index.php/blog through my browser, I get a 404 error. What am I doing wrong? Kindly help. Many thanks in advance.