Redirect actually doesn't require mod_rewrite, but that doesn't have much to do with your question.
i use RedirectPermanent in my .htaccess files for files that i've moved to other locations on my site. for example:
RedirectPermanent /ready.html http://www.track7.org/output/pen/theory/ready.php
you could try that and see if it makes any difference -- i would expect the only difference to what status code the initial request comes back with though.
is it actually named .htaccess.txt? if so, you need to remove the .txt for it to have any effect.
also, .htaccess should be at /home/username/domain.com/.htaccess -- or when you ftp it looks like /domain.com/.htaccess so you could make sure it's in the right place.
i don't know for sure, but if you had another .htaccess at /home/username/.htaccess (/.htaccess through ftp) that might be interfering with this one.
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