This could be caused by an entry in your .htaccess file that the server doesn't like. Try commenting out all lines, apart from the one about the directory index being index.php to rule this out.
Yes, like Axel says - this file won't do anything! It need to be .htaccess. In the past I've found that the lines which deny access to files can be particularly troublesome (on nvh setup, that is), but you may also have problems with mod_rewrite, so that is why I suggest you comment most of them out.
I have it running as CGI, but only version 3.3-1. It works quite well, but of course you would be subject to the 3.3-1 bugs (which probably aren't as bad as in 3.4 beta, but we wait and see :) ). The choice of which you want to use is yours, but personally I'd got for 3.4, because it should go stable fairly soon anyway (at which point you can just upgrade).
So, I renamed the mostly commented out .htaccess file, and I placed the little "hello world" php file on the 1and1.com server. It runs fine, but I still get an error 500 on the eZ publish index.php. I have an email into 1and1.com, but since the simple .php file runs fine, I doubt they'll be too much help.
Any other suggestions or installation steps that I may have missed would be appreciated. Thanks, Rick
doing a search in the forum I found:
http://ez.no/community/forum/install_configuration/3_3_url_problem_after_install_help
other 1and1: http://ez.no/community/forum/install_configuration/install_on_1and1_servers_php_cgi_perfora_net_db