Directing all requests to index.php in sub folder

[horseatingweeds]

I'm trying to figure out how to direct all requests to the index of a subfolder so I can set things up on my test server as they will be in my host server (no root access).

In my subfolder (C:Apache/htdocs/subfolder/htdocs) I have the index.php page and an .htaccess file. Here is what I have in the .htaccess:

RewriteEngine on
RewriteCond %{SCRIPT_FILENAME} !-f
RewriteCond %{SCRIPT-FILENAME} !-d
RewriteRule ^(.*)$ index.php/$1

In the http.conf file of the root (C:Apache/confi) I have made these settings:

<Directory "C:/Apache/htdocs">
Options All
AllowOverride All
</Directory>

It's not working though. I'm getting a "500 Internal Server Error." Is this just not possible or am I doing something wrong?

Apache/2.0.59 (Win32) PHP/5.2.3