I updated the permalink structure to /%postname%/ and this updated my .htaccess with:
# BEGIN WordPress
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /index.php [L]
</IfModule>
# END WordPress
But I still get 404 errors on the pages. Are there any other settings that I need to change?
Edit: if it helps the apache log seems to be looking directly in the permalinked folder. I.e.:
[Wed Oct 16 11:12:32 2013] [error] [client xx.xx.xx.xxx] File does not exist: /var/www/exampledomain/news, referer: http://exampledomain.com/