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I'm using a script for this classifieds site. I had it setup this way so that it goes right to the main page of the classifieds on the site.
Will this hurt my PR since most links are to www.mydomain.com but noone ever actually visits that page? It can't really be indexed. Is there a better way to handle this situation?
With mod_rewrite the user (including any search engine crawler) will see the front page URL with the second page's content. All redirection is done within the server before it reaches the browser (or the bot).
On the other hand, the redirect is handled by the browser. It first retrieves your front/main page and then, per the instructions in its header, retrieves the second page. If it is a permanent redirect, the SE bot *might* be smart enough to stick the new URL into its list for the next crawl, but I doubt if it would reassociate all the links to the first page to the new page.
Something like this in your httpd.conf file is all you need:
RewriteEngine on
RewriteRule ^/index.html$ /directory/classifieds.php [L]