Joomla & htaccess issues

I run many copies of Joomla on my server and they all work well.

In the past week, I have installed a 2.5 and a 3.0 site, which also work well, until I rename the htaccess file, for SEF.

Here are the errors I am getting:

[Thu May 23 20:04:47 2013] [alert] [client 46.65.93.67] /home/smesites.co.uk/public_html/demo/project/.htaccess: Option FollowSymLinks not allowed here
[Thu May 23 20:06:34 2013] [error] [client 46.65.93.67] File does not exist: /home/smesites.co.uk/public_html/demo/project/templates/responsive/img, referer: http://www.smesites.co.uk/demo/project/templates/responsive/css/bootstrap.min.css
[Thu May 23 20:08:24 2013] [alert] [client 46.65.93.67] /home/smesites.co.uk/public_html/demo/project/.htaccess: Option FollowSymLinks not allowed here, referer: http://www.smesites.co.uk/demo/project/
[Thu May 23 20:10:18 2013] [alert] [client 46.65.93.67] /home/smesites.co.uk/public_html/demo/project/.htaccess: Option FollowSymLinks not allowed here, referer: http://www.smesites.co.uk/demo/project/index.php?option=com_content&view=article&id=50&Itemid=33
[Thu May 23 20:11:36 2013] [warn] [client 46.65.93.67] mod_fcgid: stderr: PHP Notice: Undefined variable: redirect in /home/smesites.co.uk/public_html/demo/project/administrator/components/com_config/controllers/component.php on line 141, referer: http://www.smesites.co.uk/demo/project/administrator/index.php?option=com_config&view=component&component=com_joomlaupdate

I am asking this question on the Joomla forum, but concerned it is just new installs affected!

Any thoughts?

Paul