Just wanted to share my way of getting my permalinks to work on my self hosted Wordpress. I am a noob at this. I went through the forum posts regarding permalinks customization and the .htaccess and configuration got me all frustrated, confused and tired. But I found another way to get my permalinks to work but it’s a bit screwed up though if you utilize the calendar widget. Anyway that is history now, for I had Sponkers to show me how to straighten it up. Thanks bro!
Here is how I got my permalinks to work.

Under Options > Permalinks > Common Options > Custom Structure

Just copy and paste this : %postname%

Click Update Permalink Structure and it would prompt you to update your .htaccess file. Scroll all the way down and you will see this :

Copy and paste it into your .htaccess file :
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>

If you can’t be bothered with the .htaccess file, just download it here, unzip and upload to your server where you can see wp-admin, wp-content folders.
Download .htaccess file

And you are done. No more glitches if you use the calendar widget.

If you have a better solution, you are always welcome. Oh, and by the way, I can’t seem to get my RSS Feeds to function too. It’s a little perplexing trying to troubleshoot all these. Appreciate all the pointers and advices I can get. Thanks!