I'm using lighttpd for cyberciti.biz and there is no problem. Here is how you can verify it for yourself:
Code:
curl -I http://www.cyberciti.biz/tips/lighttpd-and-wordpress-setup-clean-seo-friendly-urls.html
Output:
Code:
HTTP/1.1 200 OK
X-Pingback: http://www.cyberciti.biz/tips/xmlrpc.php
Content-Type: text/html; charset=UTF-8
Date: Sat, 24 May 2008 12:31:00 GMT
Server: lighttpd (Red Hat)
Now let us try 404 stuff:
Code:
curl -I http://www.cyberciti.biz/tips/foo.html
Output:
Code:
HTTP/1.1 404 Not Found
X-Pingback: http://www.cyberciti.biz/tips/xmlrpc.php
Content-Type: text/html; charset=UTF-8
Expires: Wed, 11 Jan 1984 05:00:00 GMT
Last-Modified: Sat, 24 May 2008 12:32:13 GMT
Cache-Control: no-cache, must-revalidate, max-age=0
Pragma: no-cache
Date: Sat, 24 May 2008 12:32:13 GMT
Server: lighttpd (Red Hat)
Keep in mind, you need to create a 404.php error template file under wp-content/themese/name/404.php.
HTH