On the Root-Servers PHP is executed as a Apache module (does this help?) [I do not know how to tell if I have - CGI PHP - or not. I do see on the PHP Config page that API is CGI. Whatever that means.]
There is a file named ".htaccess_root" inside of the ezPublish directory.
if you have PHP as CGI, there was a workaround posted in the forums. I do not have a link, but it will be there somewhere, if you search vor cgi. Other than that, please check
and the pages below that, maybe you find some hints as to what is wrong.
I am not sure what exactly the problem is with the log in. Could you describe in more detail? Does the standard login work (admin/publish)? What happens if you try to log in.