.htaccess file problems?

During the installation of a new G2 set up for a friend, the install program prompted me to place an .htaccess file in the main Gallery directory with the contents:

php_value memory_limit 16M

However, when I did so I got an Internal Server Error from the host site:

Internal Server Error
The server encountered an internal error or misconfiguration and was unable to complete your request.
Please contact the server administrator,

and inform them of the time the error occurred, and anything you might have done that may have caused the error.
More information about this error may be available in the server error log.

Apache/1.3.34 Server at www.jazzcamera.co.uk Port 80

Removing it seemed to work and the rest of the installation went OK. However, now when I try to access the "modules" section of the Site Admin pages, I get:

Fatal error: Allowed memory size of 8388608 bytes exhausted (tried to allocate 46080 bytes) in /home/users/uks56819/html/jazzcamera.co.uk/gallery/lib/smarty/Smarty_Compiler.class.php on line 1346

So, I'm thinking this may be something to do with the earlier warning but as (for whatever reason) the server doesn't like this I'm stuck for ideas. I can upload pix no problem but my client wants to make use of the Cart module and obviously I can't proceed further without some help.

All contributions gratefully received!

Thanks,

Aidan