If you have added AllowOverride All within your apache2.conf or httpd.conf, .htaccess files are allowed on your server in any website.
I think that the internal 500 error occured because you did not have AllowOverride All within your Apache configuration yet.
Personally, i think it is more safe to set AllowOverride None instead of AllowOverride All. AllowOverride None means that .htaccess files are not allowed, but if you use ISPConfig, you can add the following to the Apache directive field for your Joomla site within ISPConfig:
webX is the number of your web as defined ny ISPConfig.
| Master in managed hosting