I have been playing with opencart 1.40 for a few days now and am only just getting to know it, so please go easy on me

Ok - I am trying to use the seo url feature in 1.40 - I have enabled it, renamed the .htaccess.txt to .htaccess, edited one of the demo products to have an seo keyword, then I reload opencart and get ...
The page isn't redirecting properly
Firefox has detected that the server is redirecting the request for this address in a way that will never complete.
In the browser address bar I get ... ('mysite' refers to my actual site - it's not a mistake, the actual url does have the real site address)
http://www.mysite.com/sites/openc140/ne ... _=desktops
The contents of my htaccess file are ...
# 1.To use URL Alias you need to be running apache with mod_rewrite enabled.
# 2. In your opencart directory rename htaccess.txt to .htaccess.
# For any support issues please visit: http://www.opencart.com
Just to be clear - my server is configured properly - seo does work on my other sites (cms, prestashop etc) and for what it's worth I do have cookies enabled. I am using the default skin that comes with 1.40.
Options +FollowSymlinks
RewriteEngine On
RewriteBase /
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule ^(.*)\?*$ index.php?_route_=$1 [L,QSA]
Has anyone come accross this before ? Any ideas ? Any help will be much appreciated
