You are right. I already sorted that problem out. Besides that I found out why it was not working
The problem was in httpd.conf file. In order to activate the .htaccess file for a given folder you need to use this directive:
AllowOverride All
Since I have virtual hosts, my httpd.conf file now looks like this:
NameVirtualHost 127.0.0.1:80
<VirtualHost 127.0.0.1:80>
ServerName www.xml-forums.net
ServerAlias xml-forums.net
DocumentRoot D:/www-xml-forums.net
LogLevel warn
ServerSignature On
<Directory "D:/www-xml-forums.net">
Options Indexes FollowSymLinks
AllowOverride All
Order allow,deny
Allow from all
</Directory>
</VirtualHost>