Try this out in your .htaccess file: The comments should get help get it tweaked in for you.. This works perfectly for me in several CI website installations. Also if mod_rewrite is not installed it will send you to a 404 (or you can change that to suite your purpose)
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
#'system' can be replaced if you have renamed your system folder.
RewriteCond %{REQUEST_URI} ^system.*
RewriteRule ^(.*)$ index.php/$1 [L]
#Checks to see if the user is attempting to access a valid file,
#such as an image or css document, if this isn't true it sends the
#request to index.php
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
#This last condition enables access to the images and css folders, and the robots.txt file
RewriteCond $1 !^(index\.php|(.*)\.swf|images|robots\.txt|css|docs|cache)
RewriteRule ^(.*)$ index.php/$1 [L]
</IfModule>
<IfModule !mod_rewrite.c>
# If we don't have mod_rewrite installed, all 404's
# can be sent to index.php, and everything works as normal.
ErrorDocument 404 /application/errors/404.php
</IfModule>
EDIT: Check your virtual hosts file and see if you have these items set--these may allow your htaccess file to rewrite the url correctly:
Options FollowSymLinks
AllowOverride All
Order deny,allow
Deny from all