Myself, I manage to get over the path dependencies with setting an absolute path suggested inthe config.php's below.
However, I am unable to get things running after setting short_open_tag to On in an .htaccess. Unfortuantely, setting the variable results in an unnumbered server error. The vanilla lib/htaccess gives 500 errors--I'm guessing for setting hte file upload variable.
Some of us have things working, however, so take heart! (See http://members.lycos.co.uk/strion/moodle/).
If I get time I'm going to maybe hack a wrapper for the redirect stuff and add a config variable to config.php, but don't hold your breath or let me stand in the way if you're a PHP person.
I've seen config.php issues at:
http://moodle.org/mod/forum/discuss.php?d=472&parent=1969
Session and authentication issues at:
http://moodle.org/mod/forum/discuss.php?d=695
Header redirection issues at:
http://moodle.org/mod/forum/discuss.php?d=456
Helpful config.php examples at:
http://moodle.org/file.php/5/moddata/forum/15/2024/config.php
http://moodle.org/file.php/5/moddata/forum/15/1300/config.php