I found out!
2 stupid mistakes by me in my rewrite statement:
RewriteEngine on
RewriteBase /
RewriteRule (.?)product/(.)$ $1/product.php3?$2
RewriteEngine off
1) no need for RewriteEngine off - don't know where I got that idea from.
2) extra ? in first bracket set in RewriteRule not needed.
Now it works :-)
Victoria Clare wrote: