[eluser]Colin Williams[/eluser]
Okay. So www/manage inherits the rules at www/.htaccess. When the folder is requested by way of the subdomain, the rewrite rules take effect. However, there is no www/manage/index.php, so the rewrite rule fails, and when it fails, it's told to load index.php, and so you get your infinite loop. What you need to do is add 'manage' to the list of conditions to ignore. And just get rid of the first rewrite rule.
Code:
RewriteEngine on
RewriteCond $1 !^(index\.php|manage|template|robots\.txt|favicon\.ico)
RewriteRule ^(.*)$ index.php/$1 [L]