What is a .htaccess file?
A .htaccess file is a simple ASCII file (text file), which can be created through a text editor like NotePad or SimpleText. It provides a way to make configuration changes to your website, including: password protecting folders, automatically redirecting users to different websites or locations on the current site, custom error pages, changing file extensions, banning users with certain IP addresses, only allowing users with certain IP addresses, stopping directory listings and using a different file as the index file.
Traditionally you would place a .htaccess file in the root of your public_html (Full path: /usr/www/users/ftp-username), however the location of the file is dependant on what you want to achieve. If placed in the root of the public_html the .htaccess file will have affect on your entire site. You can also place the .htaccess file in subdirectories, in which case the file will only affect files under that subdirectory.
The .htaccess file can be created on the server while logged in via Telnet, SSH or created locally on your own machine and then uploaded via FTP.