Freaking multitudes of .htaccess great balls of fire
What happens when your local host upgrades its system to Apache 2? If they forget to add the HeaderName and ReadmeName variable definitions to httpd.conf, your website may come to a screeching halt. If you suddenly find that your ftp listings no longer work right, and the BLasted-UnnamEd-HOSTing service won't take responsibility for fixing httpd.conf, you can fix things by adding the variable definitions to .htaccess files yourself.
My new .htaccess reads as follows:
HeaderName HEADER.html ReadmeName README.html
Of course, you've got to stick this file in every. single. freaking. folder on your entire website but at least you can get things working again at a local level when the tech support person (who was actually quite nice) tells you that he's not allowed to fix httpd.conf on your behalf.
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Read More Entries by Erica Sadun.

You should only have to add it to the top-level directory of concern, since Apache reads every directory on the way down.
Also, .htaccess *might* be disabled. The easiest way to find out is to put SOMEGARBAGELINE in the file (literally) and see if you get a 500 error. If you don't, then nothing else you write there will make any difference either, so don't waste your time trying to debug it. Good tip.