I was getting 403 errors whenever I enabled FURLs and used the default .htaccess file.
My host was super-helpful and got it working using the following wrapped around the Options line:
<Files ~ (\.php)>
Options +FollowSymLinks
</Files>
For this site I decided to try PHP running as a FastCGI app (running as a Module was giving me permissions headaches on an older site).
So if you also have PHP running as a FastCGI app, might be worth trying the above.