XAMPP is a very good Linux server package w/ Apache, MySQL,PHP running in Windows just like server runs in linux. You can download http://www.apachefriends.org
I noticed that by default mod-rewrite is not enabled with apache server coming with it. It is very important to enable this module if you want to rewrite URLs and generate search friendly pages. To check whether you have this already installed just create a file named test.php with content of phpinfo() inside php tags.
and point your browser to that file like localhost/test.php. You should see mod_rewrite under loaded modules. If not you have to open /Xampp/Apache/Conf/httpd.conf and find a line like below and uncomment it (remove #).
LoadModule rewrite_module modules/mod_rewrite.so
Now restart apache and it should work. Make sure you dont have any errors in .htaccess file you place as otherwise you will get Internal Server Error
