There are 3 main reasons why you will see this error:
-File or Folder Permissions
-Bad code or syntaxes in your .htaccess
-Improperly configured php.ini

In this scenario, your account has a folder with an invalid permission set. To correct this, simply restore the permissions to "755" from "777."

While each site can be different, the following permissions are most often the correct permissions to use:
Files - 644
CGI Scripts - 755
Directories - 755

Bad code or syntaxes in your .htaccess
There is a huge range of things .htaccess can do and isn't difficult to use, however if you do not enter the syntax correctly it can result in a Server 500 Error. Some common examples of what could cause an error are listed below.

FollowSymlinks
[Sun Jun 05 12:07:10 2011] [alert] [client 66.249.72.82] /home1/examplec/public_html/.htaccess: Option FollowSymlinks not allowed here
In this example the error is simple to fix; in the file specified, use a permitted directive--in this case use "SymlinksIfOwnerMatches" instead of "FollowSymlinks", or remove the line entirely.

Syntax Not Closed
[Sun Jun 05 12:11:38 2011] [alert] [client 66.249.72.82] /home1/examplec/public_html/.htaccess: /home1/examplec/public_html/.htaccess:3: <IfModule>ExampleRule/Module> was not closed.
Again, the solution is to simply fix the syntax, or remove it. In this case, close the ending "</IfModule>" directive properly and put the rules on their own line to resolve the problem.
These are just a few common examples that can be caused by bad .htaccess parameters. What you encounter will likely vary, however generally the error message is descriptive enough to determine an error from it without further investigation.

php_value
On a server without phpsuexec it is possible to use the php_value statement in a .htaccess file to change the settings of php (actually overwrite the settings from php.ini). On a sever with phpsuexec this will also result in a server error. To solve this you can use a php.ini file which you put in the same folder as where you would have put your .htaccess file. In that php.ini file you can change all the php values. You only have to put the values you want to modify in that file. By example if you want to set the short_open_tag to Off you would have used short_open_tag? = off in your .htaccess file. Using a php.ini file this results in:
[PHP]
short_open_tag = Off