SE Friendly URLs in SMF

Another issue I was having with an SMF mod brought this issue up. 

Either due to a server setting or my own incompetence, whenever I turn on SE friendly URLs in the SMF admin panel, clicking on any internal link within the forum results in a 404 error.  Because of this I have kept SE friendly URLs turned off. 

I have two questions.

#1  Has anyone seen much of a difference in their rankings with SE friendly URLs turned off or on?

#2 If this problem is worth fixing, is this usually a simple htaccess change or is it something more involved?

Thanks,
Brandon

To fix this problem you must have a different web server. This will not work on apache 2.2 + or windows servers.

As you can see we are using SE friendly urls here, but I think they don't make a real difference, as search engines finally have stoped giving value to file names and they indexing the same dynamic websites (as the most websites are dynamic in our days)

Alright.  It doesn't sound like it's worth messing with then. 

Thanks,
Brandon Drury