OK, so far, so good. Sorry for asking such an obvious question first up, but it's always best to eliminate these things early. I have run into the '500 internal error' myself, but only when I had the php.cgi file somewhere other than where I thought it was.
I assume you have checked php.cgi and it isnt 0 bytes in length or something silly like that and that it has its permissions set to 0755?
Also, it that your complete .htaccess file above, or are there other lines that may be conflicting?
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